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Dubai set to price crude on DME Oman futures |
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5/31/2007 10:23:20 AM |
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Starting tomorrow, June 1, Dubai will price its oil exports against the Dubai Mercantile Exchange (DME) Oman crude futures contract, the DME said in a Press statement yesterday.
The launch of DME, the first energy and commodities futures exchange in the Middle East, has been set for Friday (tomorrow).
DME, a joint venture between Tatweer, a member of Dubai Holding, the New York Mercantile Exchange Inc (NYMEX) and Oman Investment Fund, said this was under the directive issued by His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
"The Government of Dubai will cease pricing its export crude oil sales off its current mechanism and instead utilise DME futures prices upon launch of the exchange," the statement said.
Tatweer owns 32.5 per cent of DME while a government-owned Oman Investment Fund owns 30 per cent, and NYMEX owns 32.5 per cent. NYMEX hosts the US benchmark light sweet crude contract.
Dubai is the second Middle East oil producer to back the DME contract after the Sultanate of Oman, which has already pledged to use the new contract to price its oil. Producing some 100,000 barrels of crude per day, Dubai has in the past used price-reporting agency Platts in pricing its oil exports.
"Together, Dubai and Oman crude represent the current foundation for pricing the majority of the Middle East's crude oil sales to the Far East," the DME said. "The historic shift by Dubai further underscores the vital need for a physically backed benchmark that is representative of Middle East sour crude oil."
The statement said DME has consulted with the international energy and financial trading community over the past three years on the components necessary for creating a new benchmark crude oil contract. If found that producer support is one of the key factors to developing a successful contract. |
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Source: Khaleej Times |
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