[Federal Register Volume 61, Number 93 (Monday, May 13, 1996)]
[Notices]
[Pages 22026-22027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11924]



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COMMODITY FUTURES TRADING COMMISSION


New York Mercantile Exchange: Proposed Amendments to the New York 
Harbor No. 2 Heating Oil Futures Contract

AGENCY: Commodity Futures Trading Commission.
ACTION: Notice of availability of the proposed amendments to the New 
York Harbor No. 2 heating oil futures contract.

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SUMMARY: The New York Mercantile Exchange (NYMEX or Exchange) has 
submitted for the Commission's approval, under Section 5a(a)(12) of the 
Commodity Exchange Act and Commission Rule 1.41(b), proposed amendments 
to its New York Harbor No. 2 heating oil futures contract. The proposed 
amendments relate to the dyeing and color standards and testing 
requirements for deliverable heating oil and would apply to all newly 
listed and existing contracts beginning with the August 1996 delivery 
month. The Acting Director of the Division of Economic Analysis 
(Division) of the Commission has determined that obtaining public 
comment on the proposed rule amendments is in the public interest, will 
assist the Commission in considering the views of interested persons, 
and is consistent with the purposes of the Commodity Exchange Act. 
Accordingly, the Division, pursuant to the authority delegated by 
Commission Rule 140.96, is hereby providing notice of, and seeking 
comment on, the proposed rule amendments.

[[Page 22027]]

DATES: Comments must be received on or before June 12, 1996.

ADDRESSES: Interested persons should submit their views and comments to 
Jean A. Webb, Secretary, Commodity Futures Trading Commission, Three 
Lafayette Centre, 1155 21st Street NW, Washington, DC 20581. Reference 
should be made to the New York Harbor No. 2 heating oil futures 
contract.

FOR FURTHER INFORMATION CONTACT: Please contact John Forkkio of the 
Division of Economic Analysis, Commodity Futures Trading Commission, 
Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581, 
telephone 202-418-5281.

SUPPLEMENTARY INFORMATION: The Exchange is proposing the following 
primary amendments to the No. 2 heating oil futures contract:
    1. Adopt the IRS Dye Requirement: The Exchange is proposing to 
adopt the IRS dye requirement for tax-free sales or uses of diesel 
fuel, in lieu of the current EPA specification in the futures contract. 
In this regard, the Exchange is proposing two methods for testing for 
dye concentration: the IRS test method and the PetroSpec dye analyzer 
method.
    The Exchange justified these proposed amendments by stating that:

    In conversations with market participants, the Exchange has 
learned that heating oil dyed to the IRS specification has become 
the standard in the heating oil cash market in New York Harbor. 
Market participants stated that this product became the dominant 
type of heating oil this past winter after test methods became 
available to measure for the IRS dye concentration. * * * [t]here 
was no way to test or verify this exact level of concentration until 
recently. Consequently, the IRS did not begin to enforce the dye 
concentration requirement until the Fall of 1994, when the IRS 
purchased the PetroSpec dye analyzer for its enforcement agents use 
in the field.
    In the heating oil cash market, buyers specifically request fuel 
dyed to the IRS requirement. Thus, the Exchange is proposing to 
adopt the IRS dye specification so that the NYMEX No. 2 heating oil 
futures contract will conform more closely to cash market standards.

    2. Eliminate the ASTM D1500 Color Test: The NYMEX is proposing to 
eliminate the ASTM D1500 color test requirement in the heating oil 
futures contract. According to the NYMEX, this test no longer is valid 
for testing dyed fuel. With the dye requirement now in effect, the 
Exchange stated that it is no longer possible to run the ASTM D1500 
test accurately on dyed fuel, and, consequently, the cash market no 
longer requires this test. The NYMEX further stated that inspectors 
have been unable to assess the color of dyed fuel, the ASTM D1500 color 
test is no longer performed in the cash market, since it is not useful 
as a test of fuel quality for dyed heating oil.
    3. Require Five Additional Tests in Lieu of the Color Test: In 
order to replace the ASTM D1500 color test, and to provide 
substantively similar information on fuel quality, the Exchange 
proposes to adopt five additional tests of deliverable fuel oil to 
measure stability, haze, carbon residue, ash, and corrosion. According 
to the Exchange:

both Colonial and Buckeye Pipelines require the five additional 
tests * * *. The current NYMEX heating oil specifications already 
require these five additional tests only for heating oil samples 
that do not meet the maximum color level of 2.5 on the ASTM D1500 
color test. The proposed amendments would bring the NYMEX heating 
oil futures contract specifications more into conformity with the 
Colonial and Buckeye Pipeline specifications.

    4. Add a Second Test Method for Carbon Residue: Finally, the 
Exchange is proposing an additional test method for the carbon residue 
test, i.e., ASTM D4530. According to the NYMEX, Buckeye Pipeline 
specifies this test method, along with the existing test method 
specified in the heating oil futures contract, ASTM D524. The NYMEX 
stated that, ``inspectors from independent labs recommended that the 
Exchange adopt this additional test method ``since it is newer, more 
accurate, and easier to run.''
    NYMEX intends to apply the amendments to newly listed contracts and 
to existing contracts beginning with the August 1996 contract month.
    The Division is requesting comment on the proposed amendments and 
the implementation plan.
    Copies of the proposed amendments will be available for inspection 
at the Office of the Secretariat, Commodity Futures Trading Commission, 
Three Lafayette Centre, 1155 21st Street NW, Washington, D.C. 20581. 
Copies of the amended terms and conditions can be obtained through the 
Office of the Secretariat by mail at the above address or by phone at 
(202) 418-5097.
    Other materials submitted by the NYMEX in support of the proposed 
amendments may be available upon request pursuant to the Freedom of 
Information Act (5 U.S.C. 552) and the Commission's regulations 
thereunder (17 CFR Part 145 (1987)), except to the extent they are 
entitled to confidential treatment as set forth in 17 CFR 145.5 and 
145.9. Requests for copies of such materials should be made to the FOI, 
Privacy and Sunshine Act Compliance Staff of the Office of the 
Secretariat at the Commission's headquarters in accordance with 17 CFR 
145.7 and 145.8.
    Any person interested in submitting written data, views, or 
arguments regarding the proposed amendments, or with respect to other 
materials submitted by the NYMEX in support of the proposed amendments, 
should send such comments to Jean A. Webb, Secretary, Commodity Futures 
Trading Commission, Three Lafayette Centre, 1155 21st Street NW, 
Washington, DC 20581 by the specified date.

    Issued in Washington, DC, on May 7, 1996.
Blake Imel,
Acting Director
[FR Doc. 96-11924 Filed 5-10-96; 8:45 am]
BILLING CODE 6351-01-P