Dubai Merc Gushes Oil
The latest electronic exchange to come to Asia is the Dubai Mercantile Exchange (DME). It is scheduled to launch June 1st and will be the first energy futures exchange in the Middle East . The Exchange is a 50/50 joint venture between the New York Mercantile Exchange, Inc. (NYMEX) and a subsidiary of Dubai Holding, Tatweer Dubai Limited. The DME is located within the Dubai International Financial Centre (DIFC) and regulated by the Dubai Financial Services Authority, a regulatory body established within the DIFC and modelled after the Financial Services Authority of the United Kingdom .
Three futures contracts are slated to begin trading; the Oman Crude Oil, Brent-Oman Financial Spread Contract and the WTI-Oman Financial Spread Contract. The exchange has its own electronic trading platform called DME DirectTM. Other approved independent software vendors (ISV) include CQG, Trading Technologies , Patsystems , RTS and ION Trading. All current NYMEX Clearing Members can apply to the DME to become a DME Clearing Member and will be able to clear DME transactions subject to compliance with relevant DME and DFSA requirements. All Clearing Members must be recognised by the DFSA.
Why is the Oman crude called 'sour crude oil'? It has to do with the amount of sulphur contained in the crude oil. If this sulphur level is greater than 1% it is called sour crude. The extra impurities increase the cost of refining to gasoline so generally, sour crude is processed into heavy oil such as diesel. More information on the DME can be found here
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