Media ININ Economy We Trust
04-02-2019 Media in\ Dubai
The Dubai Mercantile Exchange (DME), the first international exchange in the Middle East for energy futures contracts, today announced an annual increase of 160 per cent in the futures trading of Oman crude futures.
Future prices represent the forward contract price of Omani crude during the months following the delivery month, such as the Amman 2017 contract period in February 2019. These trades become active when customers wish to hedge against the risk of volatile oil prices in the future.
The overall volume of these futures prices in February 2019 exceeded 43.9 million barrels, compared with 16.9 million barrels in February 2018, reflecting the growing need for customers to grow risk management in the long term using the Oman futures contract.
Oman’s forward contract from the DME has become a critical standard for oil sales from the Middle East to Asia and has been included in the official selling price of Saudi Arabia and the Kingdom of Bahrain since last October. This shift gave customers and users the opportunity to hedge against price fluctuations Through the use of the Oman Ore futures contract.
The DME has improved its pricing mechanism by adding a new security standard to its trading platform, Velocity Logic, from the Chicago Stock Exchange. This mechanism monitors sharp price fluctuations by detecting them over a predetermined period of time, A short suspension of trading allows traders to re-evaluate their trades.
“This increase is a clear indication of the growing need for hedging mechanisms in the oil markets,” said Raid Al Salami, General Manager of the DME. “Oman’s forward contract from the DME is the most efficient and transparent pricing mechanism in the region, especially after its inclusion in the pricing mechanism in the Kingdom. Saudi Arabia and the Kingdom of Bahrain last year in addition to the Sultanate of Oman and the Emirate of Dubai.
