Dubai Mercantile Exchange announces new swaps and options contracts

28 November 2010

Contracts will address customers’ risk management needs

The Dubai Mercantile Exchange (DME) has announced that six new swaps and options linked to its benchmark Oman crude oil futures contract will begin trading on 6 December.

The contracts will be launched and listed by US-headquartered CME Group, which is a core shareholder in the DME and owner of the New York Mercantile Exchange (Nymex), and cleared through the CME Clearport.     

The six futures contracts that will be available for clearing are:

  • DME Oman Crude Oil Swap Futures
  • DME Oman Crude Oil versus ICE Brent Swap Futures
  • DME Oman Crude Oil Average Price Option
  • Singapore Mogas 92 Unleaded (Platts) versus DME Oman Crude Oil Swap Futures
  • Singapore Gasoil (Platts) versus DME Oman Crude Oil Swap Futures
  • DME Oman Crude Oil Balmo Swap Futures

The introduction of a full suite of DME Oman-related risk management tools will help industry participants to manage price risk more effectively in the Middle East and Asia Pacific energy markets.

“Today’s news marks an important step forward for the DME and builds on the steady progress that we have been making since our launch just three years ago,” says Ahmad Sharaf, chairman of the DME.

“These new contracts will offer our customers greater choice in addressing their risk management needs by providing additional flexibility in hedging and trading. It will also further consolidate the DME Oman contract as the third global crude oil pricing benchmark, alongside WTI and Brent.”

The DME reported a positive uplift of 52 per cent in trading volumes in the three months to the end of September as compared to same period in 2009.

The DME launched the Oman crude oil futures contract in 2007, aiming for it to become the marker for the 12 million barrels per day of crude that move from the Middle East to Asia. Trading of futures has increased since the contract was introduced, but are still only a third of the 10,000 contracts per day the exchange has targeted as the level for commercial success.

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