First Mideast energy futures, commodities exchange launched in Dubai

Dubai Mercantile Exchange (DME), the first international energy futures and commodities exchange in the Middle East, has been launched in Dubai, local newspaper Khaleej Times reported on Saturday.

DME launched its trading at 2 a.m. local time on Friday (2200 GMT Thursday) with the Oman sour crude futures contract and two financially settled futures contracts, the Brent-Oman spread contract and the WTI-Oman spread contract.

Trading at DME ended at 1:15 a.m. local time on Saturday (2115 GMT Friday).

The time zone trading gap between European and Asian markets has now been bridged by the DME which provides a platform for the trading of energy futures and addresses the need for price discovery, the report said.

The first daily settlement price of the Oman contract, the Middle East's first and only physically-settled energy futures contract was 64.09 U.S. dollars.

It will be the first price used by Omani Ministry of Oil and Gas in calculating its official selling price. The ministry's pricing formula will be the arithmetic average of the Oman crude oil futures contract's daily settlement prices over each calendar month. The average set in June will price Oman's August cargoes.

"This is an historic and long-awaited day.... The DME is now establishing a global benchmark for the pricing of Middle East sour crude oil through the trading of our Oman crude oil futures contract," DME Chairman Ahmad Sharaf said.

DME is a joint venture between Tatweer, a member of Dubai Holding which is owned by the government of Dubai, the New York Mercantile Exchange, and the Oman Investment Fund.

Source: Xinhua