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Dubai: The Dubai Mercantile Exchange Limited (DME) said on Tuesday that it will start trading in its two new financially settled futures contracts for Brent and Oman crude on June 2.
"The introduction of these two financially settled contracts will facilitate trading by additional market participants, broadening the global reach of the Exchange and increasing its visibility throughout the industry," said Ahmad Sharaf, chairman of DME.
"The introduction of these contracts also underscores efforts at the exchange to develop and list additional products that address the risk management needs of the global energy and trading communities," he said.
The DME Brent Crude Oil Financial Contract and DME Oman Crude Oil Financial Contract will be listed for trading on DME Direc, the exchange's electronic trading system. These new contracts will provide traders on the DME with the essential tools for effecting a commonly traded over-the-counter transaction, the spread between sweet and sour crude oil benchmarks.
"Having designed these new contracts in close consultation with our customers, we are confident that they will be a success, further enhancing overall liquidity and price transparency on the DME," said Gary King, chief executive of DME.
The DME Brent Crude Oil Financial Contract will be cash-settled against ICE's Brent Crude Futures Contracts, while the DME Oman Crude Oil Financial Contract will be cash-settled against the DME Oman Crude Oil Futures Contract. The DME also received CFTC approval on a financially settled DME West Texas Intermediate Contract, which is anticipated to be launched in due course.
In addition to being cleared at the Nymex Clearinghouse, the new contracts will also be available for block trading (recently introduced by the DME) as well as Exchange for Physical and Exchange for Swap trades, using Nymex's ClearPort Clearing.
Having designed these new contracts in close consultation with our customers, we are confident that they will be a success, further enhancing overall liquidity and price transparency on the DME."
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