Two new crude contracts to be listed on DGC
Dubai Gold and Commodities Exchange (DGCX) yesterday said it would start trading two crude oil futures contracts from May 27.
Malcolm Wall Morris, CEO of the Dubai-based futures exchange, said the new contracts would be based on the world's two most significant crude oil benchmarks — West Texas Intermediate Light Sweet Crude (WTI) Oil and Brent Crude Oil (DBRC).
The launch of WTI and Brent Crude Oil futures on DGCX, a week ahead of a similar cash-settled Brent contract by the Dubai Mercantile Exchange, makes the world's two most significant crude oil benchmarks available to both regional and international market participants, allowing them to benefit from trading and clearing transactions under the UAE regulatory and taxation regimes.
Morris said the exchange was responding to customer demand by removing cost and time inefficiencies. "The WTI contract will be settled based on prices on the New York Mercantile Exchange (Nymex) and the Brent contract on prices on the Intercontinental Exchange, (ICE). Both contracts, denominated in U.S. dollars, will be cleared by the Emirates Securities and Commodities Authority."
"Since the start of trading in November 2005, DGCX has demonstrated, under the regulatory guidance and support of the Emirates Securities and Commodities Authority (ESCA), the existence of large liquidity pools in the Middle East and the growing need of market participants to access viable risk management and investment tools. This combined with the increased recognition from our international clients of the benefits of transacting and clearing business from within the UAE, makes our new offering an extremely attractive proposition,” he said. "Making the world's crude oil benchmarks available directly to the world's premier oil producing region and allowing regional participants to maintain business within the Middle East has benefit beyond measure.”
A fee waiver will be in place for the DBRC and WTI Crude futures contracts from launch through to 26th August 2008.
The new DGCX oil futures contracts will trade from 08:30 a.m. to 11:30 p.m. local Dubai time or from 04:30 a.m. through 07:30 p.m. GMT or from 00:30 am through 03:30pm Eastern time. Each DGCX crude oil futures contract is sized at 1,000 barrels, with the contract price quoted in US dollars and cents per barrel. The minimum price fluctuation will be one cent per barrel, equivalent to a tick value of $10.00, Morris explained.
DGCX is also planning to launch plastics futures contracts in the first half of this year. Dubai Mercantile is also planning the same.
Gary King, Dubai Mercantile's chief executive officer, was quoted by Bloomberg its futures contracts will clear at the Nymex Clearinghouse and will offer the same safeguards and standards and net-margining benefits as its existing contracts and the Nymex energy contracts. The contracts will add Dubai Mercantile's Oman Crude Oil Futures Contract, which King said is the first Middle East sour crude still trading a year after it started.
DGCX, a venture between the Dubai Multi Commodities Centre, Financial Technologies India Ltd. and the Multi-Commodity Exchange of India Ltd, made its debut with the gold contract trading in November 2005, followed by silver, the pound, euro and yen currencies, and fuel oil and steel. Dubai Mercantile is a venture of Nymex Holdings Inc., Dubai Holding LLC and the Oman Investment Fund.
/Khallej Times/
Malcolm Wall Morris, CEO of the Dubai-based futures exchange, said the new contracts would be based on the world's two most significant crude oil benchmarks — West Texas Intermediate Light Sweet Crude (WTI) Oil and Brent Crude Oil (DBRC).
The launch of WTI and Brent Crude Oil futures on DGCX, a week ahead of a similar cash-settled Brent contract by the Dubai Mercantile Exchange, makes the world's two most significant crude oil benchmarks available to both regional and international market participants, allowing them to benefit from trading and clearing transactions under the UAE regulatory and taxation regimes.
Morris said the exchange was responding to customer demand by removing cost and time inefficiencies. "The WTI contract will be settled based on prices on the New York Mercantile Exchange (Nymex) and the Brent contract on prices on the Intercontinental Exchange, (ICE). Both contracts, denominated in U.S. dollars, will be cleared by the Emirates Securities and Commodities Authority."
"Since the start of trading in November 2005, DGCX has demonstrated, under the regulatory guidance and support of the Emirates Securities and Commodities Authority (ESCA), the existence of large liquidity pools in the Middle East and the growing need of market participants to access viable risk management and investment tools. This combined with the increased recognition from our international clients of the benefits of transacting and clearing business from within the UAE, makes our new offering an extremely attractive proposition,” he said. "Making the world's crude oil benchmarks available directly to the world's premier oil producing region and allowing regional participants to maintain business within the Middle East has benefit beyond measure.”
A fee waiver will be in place for the DBRC and WTI Crude futures contracts from launch through to 26th August 2008.
The new DGCX oil futures contracts will trade from 08:30 a.m. to 11:30 p.m. local Dubai time or from 04:30 a.m. through 07:30 p.m. GMT or from 00:30 am through 03:30pm Eastern time. Each DGCX crude oil futures contract is sized at 1,000 barrels, with the contract price quoted in US dollars and cents per barrel. The minimum price fluctuation will be one cent per barrel, equivalent to a tick value of $10.00, Morris explained.
DGCX is also planning to launch plastics futures contracts in the first half of this year. Dubai Mercantile is also planning the same.
Gary King, Dubai Mercantile's chief executive officer, was quoted by Bloomberg its futures contracts will clear at the Nymex Clearinghouse and will offer the same safeguards and standards and net-margining benefits as its existing contracts and the Nymex energy contracts. The contracts will add Dubai Mercantile's Oman Crude Oil Futures Contract, which King said is the first Middle East sour crude still trading a year after it started.
DGCX, a venture between the Dubai Multi Commodities Centre, Financial Technologies India Ltd. and the Multi-Commodity Exchange of India Ltd, made its debut with the gold contract trading in November 2005, followed by silver, the pound, euro and yen currencies, and fuel oil and steel. Dubai Mercantile is a venture of Nymex Holdings Inc., Dubai Holding LLC and the Oman Investment Fund.
/Khallej Times/
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