Business | Economy
DME celebrates milestone in crude oil futures trading
More than 500,000 lots of the benchmark DME Oman Crude Oil Futures Contract of the Dubai Mercantile Exchange Limited (DME) have traded since the launch of the Middle East's premier energy futures and commodities exchange on June 1, 2007.
- Staff Report
- Published: 23:16 December 3, 2008
Dubai: More than 500,000 lots of the benchmark DME Oman Crude Oil Futures Contract of the Dubai Mercantile Exchange Limited (DME) have traded since the launch of the Middle East's premier energy futures and commodities exchange on June 1, 2007.
At the close of trading on Tuesday, the DME Oman Crude Oil Futures Contract had traded 500,495 contracts, equivalent to 500.495 million barrels of oil, the DME said in a statement.
Ahmad Sharaf, chairman of the DME, said: "This is a truly remarkable milestone that clearly demonstrates the steady progress that we have been making since our launch last year."
"The DME Oman Crude Oil Futures Contract is increasingly recognised as the first successful exchange traded contract for price transparency in the East of Suez markets, joining West Texas Intermediate (WTI) and Brent crude oil futures contracts as the world's benchmarks for crude oil," he said.
Tom Leaver, chief executive of the DME, added: "We have seen growing acceptance and demand for the DME Oman Crude Oil Futures Contract as a risk management tool from the Asian refining community, as well as demand from international traders leveraging arbitrage opportunities."
Trading half a million contracts over 18 months is a clear mark of the success of the contract and its direct relevance for price transparency and fair value for the East of Suez market.
"This success was underscored by the commitment of seven international companies purchasing equity stakes in the DME during 2008, demonstrating that even in a turbulent financial climate, there is a compelling value proposition offered by the DME."
Region-specific
plastic futures
Developing its portfolio of innovative products, the Dubai Gold and Commodities Exchange (DGCX) yesterday said it will launch the world's first region-specific plastic futures next February 5.
DGCX will offer plastic futures contracts on Linear Low Density Polyethylene (LLDPE) and Polypropylene (PP), creating a new and transparent pricing mechanism specific to two regions - the Middle East and South East Asia. Ahead of the launch, DGCX has approved leading warehouses and Delivery Point Operators.
"For the first time, plastic futures prices will incorporate local costs and regional demand-supply differences, enabling convergence of futures prices with those of the physical market," Malcolm Wall Morris, Chief Executive Officer, DGCX said.
The petrochemical sector and its downstream industries are key drivers of economic growth in the Gulf region. Capacity expansion, easy access to feedstock and proximity to the high-growth Asian markets have ensured that the Middle East is the hub of global petrochemical trade.
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