Dubai Mercantile Exchange (DME) yesterday issue a public consultation to add Abu Dhabi Murban crude oil as an alternative delivery crude into its flagship DME Oman Crude Oil Futures Contract, after receiving preliminary regulatory approval.
With a production capacity of approximately 1.7 million bpd, out of which 40 per cent are freely traded, Murban will be deliverable through the exchange on certain market situations at the seller’s option. This potentially adds around 700,000 barrels per day to the standard Oman crude oil delivery mechanism and reinforces the benchmark transparency and fair market value representation.
Ahmad Sharaf, Chairman of DME, said: “We are committed to enhance Oman crude benchmark so it is always aligned with current market trends. The oil industry went through several changes in the past decade, therefore, the benchmark had to evolve to reflect latest market dynamics and both consumers and producer’s needs.”
DME’s Oman Crude Oil Futures Contract is currently used by the governments of Oman, Dubai, Saudi Arabia and Bahrain to set their official selling price of crude oil export heading to Asia. The contract is widely traded by a wide diversity of customers around the globe and more than 80 players participate in the price discovery mechanism on the Exchange on any given trading day.
Sharaf added: “The potential addition of a new grade will bring an additional level of security to the DME Oman benchmark and strengthen its status as the most reliable price discovery mechanism for Middle Eastern crude oil.”