Strong futures trading raises Dubai's profile

Trading in Dubai's crude futures contract is up 58 per cent for the year, the Dubai Mercantile Exchange reported.

Trading in Dubai's crude futures contract is up 58 per cent for the year, the Dubai Mercantile Exchange (DME) reported, strengthening its prospects of becoming a leading benchmark in the global oil trade. Backers of the DME's Oman Crude Oil Futures Contract say it offers the best means of setting prices for the Gulf's oil exports, but in its two-year lifespan the contract has struggled to achieve sufficient trading volumes to serve as a realistic benchmark, experts and oil traders say.

Trading in the Oman contract increased markedly this year and hit a record daily average of 2,624 trades last month, the DME said. At the start of the year, volumes often fell below 1,000 per day. Ahmad Sharaf, the exchange chairman, said the Oman contract was "increasingly regarded as the fairest and most transparent pricing benchmark in the East of Suez region". "This positive news is yet further demonstration of growing market confidence in the DME Oman contract," he said.

The increase in trading activity followed the Dubai Government's decision in June to directly link the price of its petroleum exports to the contract's settlement price. Volumes also benefited from the contract's February listing on the CME commodities exchange in the US. @Email:[e-mail]