| New York, N.Y., March 8, 2005 — The New York Mercantile Exchange, Inc., today released the findings of an internal market data study of trading volume and open interest analyzing the participation of hedge funds in two of the Exchange's largest futures markets during 2004. In the benchmark light, sweet crude oil futures market, hedge fund activity constituted only 2.69% of trading volume, while in the natural gas futures market hedge funds made up 9.05% of trading volume. As a percentage of open interest, hedge funds constituted 13.4% in the crude oil futures market and 20.4% in the natural gas futures market. The study analyzed the influence of hedge fund participation on price volatility and included a statistical test for causality. The findings were that hedge fund participation does not cause volatility and, in fact, appears to dampen volatility. Exchange President James E. Newsome said, "The findings of the study are consistent with our belief that hedge funds do not negatively impact our markets. They generally hold positions significantly longer than other market participants which supports the conclusion that hedge funds are a non-disruptive source of liquidity to the market. With regard to price volatility in the natural gas futures market, when hedge fund activity alone, as well as in connection to inventory changes, the data strongly suggests that changes in hedge fund participation result in decreases in price volatility." To receive a copy of the study by email, contact the press office at pressoffice@nymex.com. # # #
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