29 May 2007 16:00 [Source: ICIS news]
SINGAPORE (ICIS news)--The Dubai Mercantile Exchange (DME), said on Tuesday that the Oman Investment Fund (OIF) had completed the purchase of a 30% stake in the energy futures exchange, the first of its kind in the Middle East.
The move follows an announcement by Oman in November last year that it is to adopt forward pricing for its crude based on daily settlement prices for the DME Oman Crude Oil futures contract, which is due to start trading on 1 June 2007.
Ahmed bin Abdulnabi Macki, chairman of the OIF said: “The Oman Investment Fund is pleased to participate as a strategic partner in developing the Dubai Mercantile Exchange and we are also excited that the Exchange will use the new benchmark Oman Crude Oil futures contract. The Sultanate of Oman views this as a significant milestone for the fast growing financial markets of the region.”
The OIF joins with two other DME partners, the New York Mercantile Exchange (NYMEX), which will also provide clearing and settlement services to the exchange, and Tatweer, which is a member of Dubai Holding.
Meanwhile, the Intercontinental Exchange (ICE) launched its rival ?xml:namespace>
The ICE contract enjoyed a modestly successful first week of trade, but volumes remained a fraction of those for WTI and Brent. On 28 May, total volume reached some 4,465 lots, with some 2018 lots trading for the front month August contract.
However, unlike the DME Oman Crude Oil futures contract, which has the advantage of allowing for the physical delivery of
ICE and the DME have developed their futures contracts in order to remedy perceived deficiencies in the
Business in this market is presently conducted via over the counter (OTC) deals with limited price transparency, liquidity issues and counter party credit risks.
Approximately two thirds of Middle East crude exports are made to the Asia Pacific region, and buyers within the region source over 70% of their crude requirements from the
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