Dubai oil exchange switches to CME platform
Dubai, February 1, 2009
The Dubai Mercantile Exchange (DME) will complete the switch to the trading platform of the world's largest derivatives exchange overnight, in a move the DME hopes will boost trade of its Oman oil contracts.
The DME's contracts will trade on the US CME Group's Globex trading platform from 3am (2300 GMT), the DME said in a statement.
"This next step in our development will open the contract to a new and diverse set of market participants," DME chief executive Thomas Leaver said in the statement.
New York Mercantile Exchange (Nymex) crude contracts, the most actively traded oil futures worldwide, also uses the Globex platform.
The Oman contract was launched in June 2007 and has survived longer than other attempts to establish a crude futures benchmark for the around 12 million barrels per day of Middle East oil that moves to Asia.
But volumes remain thin and the exchange has yet to attract any of the region's big producers to use it to price their oil. Still, volume reached a new record of 6,484 lots on January 13, up almost 35 per cent from the previous high.
The Oman contract is the first Middle East sour crude contract to have the backing of oil producers. Dubai and Oman each own 25 percent in the DME and use it to price their oil.
The DME reached out to investment banks last year as part of its plan to boost liquidity, selling stakes in the exchange to Morgan Stanley and Goldman Sachs, before they both became commercial banks as the credit crunch hit.
JP Morgan also bought a stake. The CME Group acquired its 25 per cent stake in the DME when it agreed last March to buy the energy and precious metals mart Nymex.-TradeArabia News Service