Trading volumes continue upward trend at DME

Dubai: The Dubai Mercantile Exchange (DME) has continued to register a record number of contracts traded, bolstered by the trouble-free transition on February 1 to the CME Group's Globex platform, the world's largest electronic trading platform.

The average volume of contracts traded in January was 2,052, the second highest monthly average after the 2,082 recorded in November 2008.

At the same time, levels of open interest in DME Oman crude oil futures saw a record high in January, reaching 17,252 contracts, beating the previous record of 14,294 from April last year. The largest number of volumes recorded in a single day was 6,484 on January 13 another record.

The DME, a joint venture between Oman, Dubai and the New York Mercantile Exchange, launched trading with its Oman contract in June 2007. Since its inception, the total number of DME Oman crude oil futures contracts traded is 581,436.

"The DME Oman crude oil futures contract clearly fulfils the market's need for transparency and fair value, as well as for a robust risk management mechanism in these volatile markets" said DME Chairman Ahmad Sharaf.

"Offering security to traders in times of credit uncertainty, through central counterparty clearing at Nymex, as well as price transparency for crude oil destined for East of Suez markets, the DME has established an international presence with a strong customer base across the trading community and energy market participants," he said.

Though traded volumes are indicating a growing attractiveness of the DME, they are still insufficient to lure significant regional oil players to trade on it.

However, experts expect that the DME Oman trading platform will get an increasingly larger share of the hedging and speculation business because it provides a more feasible option from a regional perspective.