Oman crude oil futures begin trading on Dubai Financial Market

The new contract is traded in US dollars and cash-settled daily

The Dubai Financial Market on Wednesday said it began trading Oman crude oil futures contracts providing a new opportunity for investors. Photo: DFM

Oman crude oil futures began trading on the Dubai Financial Market (DFM) on Wednesday.

The new futures monthly contract from DFM tracks the performance of DME’s (Dubai Mercantile Exchange) Oman crude oil futures, making it accessible to a large number of investors, the DFM said in a statement on Wednesday.

The crude oil futures are traded in US dollars and are cash-settled daily, according to their closing price.

“The launch of Micro DME Oman Crude Oil Futures ... brings in an entirely new asset class to the market enabling our investors, in particular retail investors, to participate in the opportunities of one of the key economic sectors in the region,” said Hamed Ali, chief executive of DFM and Nasdaq Dubai.

The move by the Dubai bourse comes as the emirate seeks to boost liquidity on the stock market and attract more listings.

Last year, Dubai revealed plans to list 10 state-owned companies as part of its strategy to increase the size of its capital market and attract foreign investment.

Currently dominated by financial services and real estate companies, the government aims to further diversify the sectors on the DFM. Dubai approved a market maker fund worth Dh2 billion ($544 million) last year to encourage listings from sectors including energy, logistics and retail.

In April, the Dubai Electricity and Water Authority became the first public entity to list on the DFM, raising Dh22.41bn in an oversubscribed share sale.

The Oman crude oil contracts will be supported by three market makers, xCube, Al Ramz Capital and BHM Capital.

They will be offered by several DFM trading members, including International Securities, BHM Capital Financial Services, Al Ramz Capital, Mena Corp Financial Services, Al Dar Shares and Bonds, Sico Financial Brokerage, EFG Hermes and Arqaam Securities, according to the statement.

"The new contracts are also the first outcome of the collaboration agreement between DFM and DME to develop new investment opportunities and offer retail investors the opportunity to be directly involved in the biggest and most relevant asset class in the region," DFM said.