Kuala Lumpur - June 12, 2006: The Dubai Mercantile Exchange Limited (DME) today unveiled details of its Oman Crude Oil Futures Contract and updated the Asian market on its progress towards launch in the fourth quarter of 2006.
Speaking at the prestigious Asia Oil & Gas Conference (AOGC) in Kuala Lumpur, Malaysia, DME Chief Executive Gary King noted that a year ago the creation of the Exchange had been announced in New York by its joint venture partners Tatweer, a member of Dubai Holding, and the New York Mercantile Exchange (NYMEX).
"Two days later, our Chairman and the President of NYMEX were in Kuala Lumpur at this very same conference to introduce the DME to the Asian markets that are so important to us," said Mr King.
"It is no coincidence that we are here again today to report on the DME's progress. One of the developments that gives us the most confidence that our new Exchange will be a success is the support we have received in this region, where initial scepticism has turned into very positive feedback. Customers in Asia know that the DME will bring them the benefits of greater price transparency, increased market liquidity and the more effective management of risk.
"I am therefore delighted to share with you for the first time further details of the futures contract that we have developed in collaboration with various ministries within the Sultanate of Oman."
Mr King revealed that the contract will be known officially as the Oman Crude Oil Futures Contract. The contract has undergone intensive market consultation and will contain the following key terms and conditions:
Mr King continued: "The current market situation presents an ideal opportunity for this contract to succeed. Despite its status as the world's largest hydrocarbon region, the Middle East still lacks a robust and liquid price discovery mechanism for its crude oil. The two leading crude oil futures benchmarks, WTI and Brent, reflect the value of sweet crude oil, not Middle East sour crude oils. We are confident that both producers and their customers will see the benefits to them when the Oman Crude Oil Futures Contract starts trading on the DME."
Mr King reported that much has been achieved in the past year to ensure that the Exchange will launch successfully in the fourth quarter of 2006. Most notable is the continuing support that the DME is receiving from Oman. The regional and international markets are also responding favourably to the DME's proposition following a series of roadshows.
He continued: "We have a first-class management team in place and have made some important decisions on what the DME will look like. We are finalising the process for deciding membership of the Exchange. We have decided to trade electronically while also physically locating a community of traders on the Exchange floor in unique trading hubs.
"Our building, located within the Dubai International Financial Centre, and trading facilities are nearing completion. And we have recently announced plans for the creation of the DME - AUD Academy with the American University in Dubai which will give people from the region the skills and information needed to trade on the Exchange. While work remains to be done, this all bodes well for the future success of the DME."