Saudi Arabia stops using NYMEX to price oil, moves away from US future markets - November 2009

Saudi Arabia has announced that Saudi oil prices will no longer be determined by the "New York Merchan-tile Exchange"  (NYMEX), Instead  a London Based index will be used to determine prices. It strikes a blow to the dominance of the New York Mercan-tile Exchange.

This is relevant to silver because:

• It signals a shift away from the US Future exchanges and could be a pre-condition towards pricing oil in currencies other than the USD. A sudden shift away from the USD is likely to cause Precious Metals prices to raise as uncertainty about the USD's role as a reserve currency increases. 
• Prices of Silver are also determined in large part in the NYMEX. There are very large paper short positions in the NYMEX by a few US banks and current exchange rules are very permissive towards naked short selling  of very large numbers of silver contracts. If a similar move away from NYMEX should happen for Silver this is likely to be bullish for prices as speculative short positions are likely to be reduced. For more details and a good chart on the relationship between short positions and silver prices see  Silver Short Positions and Prices .

Read the full article at:  Why Saudi Arabia is leaving the Nymex

On a site note,  Turkey will se national currencies in trade with Iran, China in the future. afurthe move away from the USD. See the full article at:   en.rian.ru/business/20091028/156617011.html .