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Number of participants get recorded, DME records strong growth in forward trading

Dubai Mercantile Exchange (DME), the chief worldwide vitality fates exchange in the Middle East, today declared a 45% boost quarter-on-quarter in trading activity on the exchanges forward curve and a 33% development in Exchange Average Daily Volume (ADV) during the first half of 2019.

Forward Curve volume achieved 208,997 contracts from April 2019 through June 2019 versus 143,703 contracts traded in Q1 2019. Exchange ADV increased from 5,024 in January 2019 to 6,695 in June 2019.

The forward curve speaks about the value of Oman Blend Crude Oil in future months. A liquid forward curve enables customers to ensure themselves against future price movement in Oman crude oil.

Total ADV in the pricing curve, M1 (month 1) to M7, in June 2019 reached 6.1 million barrels compared to 3.5 million barrels in June 2018. This is a significant improvement since further NOC partners such as Saudi Aramco started utilizing DME Oman as part of its Crude Oil pricing mechanism.

What's more, close to 150 million barrels of Oman crude oil were delivered by means of the Exchange during the first six months of the year, keeping up DMEs position as host to largest physical delivery on any global futures contract.

Raid Al-Salami, Managing Director, DME, stated: DME Oman has consistently been a highly proficient and transparent price discovery mechanism for regional crude oil. We will keep on developing the market with our valued customers and our current and future NOC partners, where we endeavor to provide an unrivaled platform for traders that will guarantee the sustainable growth of the sector.

The DME Oman crude oil futures contract has become a benchmark for sales of Middle East crude oil into Asia. The DME Oman contract was included in the calculation of the official selling price of Saudi Arabia and Bahrain from October 2018. The increase in liquidity along the forward curve allows for customers to better manage price movements during these times of high volatility, he added.

Customer participation has risen significantly in 2019, with a record number of 120 companies utilizing the collateral efficiencies offered against other major crude oil benchmarks (WTI, Brent, Dubai, and Oman) within the CME clearing house where DME Contracts are settled.

DME has also enhanced its pricing mechanism by adding a new security measure CME Groups Velocity Logic to the Exchanges platform. Velocity Logic works to deter extreme price moves by detecting sharp price movements within a predefined time period and then briefly pausing the market to allow traders to reassess their positions.

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