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Monday, November 10, 2008
Chicago, Dubai Pact Creates Central Platform for Oil Trades
By Dunstan Prial
FOXBusiness
CME Group (CME), which owns and operates two U.S. derivatives exchanges, announced an exclusive partnership Monday with the Dubai Mercantile Exchange, an energy futures and commodities exchange based in the Middle East, which will allow all three global benchmark oil products to trade on the same platform.
Under the agreement, the DME’s contracts will trade electronically on the CME Globex platform starting in the first quarter of 2009.
The companies said adding the DME’s contracts to the CME’s menu of products will increase transparency in often-opaque energy derivatives markets.
The plan is still subject to final DME board approval, the exchanges said in a statement. The CME Globex, an electronic trading system, offers nearly 24-hour access to a broad array of derivatives products in every major asset class in more than 85 countries and foreign territories worldwide, the companies said.
The transition of the DME Oman Crude Oil Futures Contract to CME Globex, according to the companies, will allow the world’s three crude oil benchmark products to trade on the same platform.
According to the statement, the DME Oman Crude Oil Futures Contract is increasingly being recognized as the first successful exchange traded contract for price transparency in “East of Suez markets,” and has joined West Texas Intermediate (WTI) and Brent crude oil futures contracts as the world’s benchmarks for crude oil.
“As growing demand from Asia continues to drive fundamentals in the oil industry, there is increasing need for a transparent mechanism to determine the price of crude imported into the region,” the companies said.
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