The Dubai Mercantile Exchange (DME), the platform for trading in the Oman crude futures contract, expects contract volumes to rise by up to 40 per cent next year.
The increase will come as the exchange adds members and looks for new ways to boost oil trading that reached US$18 billion last year, its chief said on Wednesday.
The DME, which trades physical oil, expects to close this year with average trading of about 8,700 contracts a day, an approximately 34 per cent increase over the 6,500 average of contracts traded a day last year, said Christopher Fix, the DME chief executive, at the Platts Middle East Crude Oil Summit in Dubai.
“We have been growing at a very steady rate of 30 to 40 per cent [a year],” said Mr Fix. “So we just see that we are going to continue a very strong growth trajectory in 2015.”
The DME is 50 per cent owned by the CME Group, which also owns Nymex, and is the world’s largest futures exchange owner. Oman Investment Fund, the Arabian Gulf state’s sovereign wealth fund, owns 29 per cent, Dubai Holding 9 per cent and the remaining 12 per cent is held by a number of investors including Royal Dutch Shell.
The exchange, which only trades Oman crude, is looking for ways to boost trading of the benchmark, which has been used by Dubai to price its oil since 2009.
Oman, the largest Middle Eastern oil producer that is not a member of Opec, uses the monthly averages generated by the exchange to price its crude. The benchmark that is used by most Middle East crude producers is Platts’ Dubai price assessment.
The DME, which was set up in 2007, has signed agreements with exchanges in China, Japan and South Korea to boost business and capitalise on the spread difference between the DME Oman contract and other contracts in Asia.
“Naturally there is going to be a difference whether it’s the freight element or the currency element or the volatility of the price during the voyage, so we are going to quantify and find a way for us to be able to allow our customers to trade that and that’s what I mean by a spread,” said Mr Fix.
“In the US, there is a spread between the WTI contract and Brent. Traders like to be able to have that volatility and capture it and trade it,” he said.
“We are going to mimic the same concept across these other exchanges [in Asia] in the same fashion.”
dalsaadi@thenational.ae
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The specs
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Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
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How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Jigra
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Company%20Profile
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3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
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