DUBAI: The Dubai Mercantile Exchange (DME), the United Arab Emirates-based oil trading market, said six new swaps and options contracts linked to its benchmark Oman crude oil futures contract will begin trading in December. The contracts, including Oman swap futures and gasoline versus crude swap futures, will begin trading on Dec. 6, the exchange said in an e-mailed statement Friday. The new contracts will be listed by CME Group Inc., which is a shareholder in the DME and owner of the New York Mercantile Exchange, and cleared through CME Clearport. “These new contracts will offer our customers greater choice in addressing their risk management needs by providing additional flexibility in hedging and trading,” DME Chairman Ahmad Sharaf said in the statement. “It will also further consolidate the DME Oman contract as the third global crude oil pricing benchmark, alongside WTI and Brent.” The DME is seeking to establish its Oman crude futures contract, which gives investors the option to take physical deliveries, as the basis for Middle East producers to their price oil, which is mostly shipped to Asia. The standard for region is currently the average of the Dubai and Oman price assessments that allow traders to take delivery of oil from Dubai, Oman and Abu Dhabi's Upper Zakum field. Those assessments are published daily by Platts, the energy-information division of McGraw-Hill Cos. Saudi Arabia began at the start of this year pricing its oil to the US at differentials to the Argus Sour Crude Index, a measure of high-sulfur oil produced in the Gulf of Mexico, in place of the WTI price published by Platts. Kuwait and Iraq followed suit, sparking interest producers might eventually move the marker for Asian- bound crude to the DME. WTI, or West Texas Intermediate, and Brent are the main benchmark prices for crude traded in the US and European markets respectively. The DME said it will hold seminars in Tokyo and Singapore on Dec. 7 and Dec. 9, respectively, to brief traders. The six contracts are DME Oman Crude Oil Swap Futures; DME Oman Crude Oil vs. ICE Brent Swap Futures; DME Oman Crude Oil Average Price Option; Singapore MOGAS 92 Unleaded vs. DME Oman Crude Oil Swap Futures; Singapore Gasoil vs. DME Oman Crude Oil Swap Futures; and DME Oman Crude Oil BALMO Swap Futures. MOGAS refers to motor gasoline and the relevant prices for it and gasoil used for the DME swaps will be based on Platts assessments, according to the statement. BALMO refers to the balance of the month.
