September Trading Continues With Strong Volumes
The Dubai Mercantile Exchange Limited (DME) today announced the successful delivery of contracts traded during the initial month of the Exchange. During the month of June the DME's benchmark contract, the Oman Crude Oil Futures Contract, went to expiration with open interest of 4,000 contracts, equivalent to 4,000,000 barrels of crude oil. These transactions were overseen by the Exchange and guaranteed by the Exchange's Clearinghouse, and were successfully delivered during the month of August.
The DME confirmed that the process was conducted seamlessly and all deliveries were completed in accordance with the terms and conditions of the contract, marking the conclusion of the first full trading cycle. Physical deliveries began in August 2007 with the crude oil being delivered through the Mina Al Fahal storage and loading facilities in the Sultanate of Oman.
Commenting on the DME's first physical delivery, Ahmad Sharaf, Chairman of the DME said: "We are pleased to have successfully concluded another major milestone at the DME following our historic launch in June of this year. With the conclusion of the first physical deliveries, we have not only shown that the Oman Crude Oil Futures Contract, converges with the physical market, but we have also demonstrated that all aspects of the contract Â are sound, viable and are well placed to meet the industry's needs.
"As noted at the conclusion of the first month's trading on 29 June, we believe that the high levels of open interest and the 4,000 contracts that have now been physically delivered confirm the market's need for a physically delivered rather than a financially settled crude oil futures contract.
Gary King, Chief Executive Officer of the DME added "While trading volumes have not been as significant over the summer months, we believe that the completion of the first trading cycle with a successful physical delivery is a strong endorsement of the contract and a milestone that many industry players have been waiting to see. We remain extremely positive and confident about the development and progress that the Exchange has made to date and will continue to work towards our goal of creating a global benchmark for the pricing of Middle East sour crude oil. With the ongoing support of the industry, we believe that this contract and others in the pipeline will provide traders with the effective tools to be able to manage their price risk."
Following the notable completion of the first physical deliveries, trading for the month of September has also begun on a high note. Thus far, the Exchange has reported a total of 12,108 contracts traded during the first week of this month in its benchmark Oman Crude Oil Futures Contract.
The Exchange is also currently in the process of overseeing 2,567 contracts for physical delivery in September and an additional 2,356 contracts in October.