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Dubai Mercantile Exchange Plans Oil Swaps, Options |
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March 10th, 2010 |
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The Dubai Mercantile Exchange, where the largest physically delivered futures contract in the world is traded, plans to introduce oil swaps and options against its benchmark sour-crude in the coming months.
The exchange is awaiting approval from the U.S. Commodity Futures Trading Commission before introducing the derivatives, based on the DME’s Oman crude contract, a Persian Gulf benchmark for Asia, DME Chairman Ahmad Sharaf said yesterday in Houston.
“We’ve got them in before the CFTC for approval,” he said in an interview at a Cambridge Energy Research Associates conference. “Once we do have that approval, hopefully in the coming months, we’ll go ahead and introduce them into the market. All of our contracts need to get checked off by the CFTC because they’re cleared in the U.S.”
The CFTC is the U.S. commodity market regulator. Sharaf said he couldn’t be more specific about the timetable.
About 13.5 million barrels of crude will be delivered against the April Oman contract traded on the exchange, making it the largest physically deliverable futures contract in the world, Sharaf said.
The New York Mercantile Exchange and the Intercontinental Exchange trade hundreds of thousands of oil contracts each day. Most of that volume is generated by traders who don’t hold onto the contracts until expiration and so don’t have to make physical delivery.
Oman futures for May delivery were at $78.36 a barrel on the DME, up 21 cents, or 0.3 percent, at 2:40 p.m. Singapore time. The contract fell 0.8 percent to end yesterday’s session at $78.15, with 1,006 contracts traded.
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Source: www.businessweek.com |
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