DME records strong growth in forward trading; record number of participants

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  • Average Daily Volume (ADV) in forward curve up 45% during Q2 versus Q1
  • Record number of participants trading Oman futures contract in 2019
  • Aggregated Oman crude oil deliveries on DME now total over 2.2 Billion barrels

Dubai Mercantile Exchange (DME), the premier international energy futures exchange in the Middle East, today announced a 45% increase quarter-on-quarter in trading activity on the exchange’s forward curve and a 33% growth in Exchange Average Daily Volume (ADV) during the first half of 2019.

Forward Curve volume reached 208,997 contracts from April 2019 through June 2019 versus 143,703 contracts traded in Q1 2019. Exchange ADV increased from 5,024 in January 2019 to 6,695 in June 2019.

The forward curve represents the value of Oman Blend Crude Oil in future months. A liquid forward curve allows customers to protect themselves against future price movement in Oman crude oil.

Total ADV in the pricing curve, M1 (month 1) to M7, in June 2019 reached 6.1 million barrels compared to 3.5 million barrels in June 2018. This is an important development since further NOC partners such as Saudi Aramco started utilizing DME Oman as part of its Crude Oil pricing mechanism.

In addition, close to 150 million barrels of Oman crude oil were delivered via the Exchange during the first six months of the year, maintaining DME’s position as host to largest physical delivery on any global futures contract.

Raid Al-Salami, Managing Director, DME, said: “DME Oman has always been a highly efficient and transparent price discovery mechanism for regional crude oil. We will continue to develop the market with our valued customers and our current and future NOC partners, where we endeavor to provide an unrivaled platform for traders that will ensure the sustainable growth of the sector.”

“The DME Oman crude oil futures contract has become a benchmark for sales of Middle East crude oil into Asia. The DME Oman contract was included in the calculation of the official selling price of Saudi Arabia and Bahrain from October 2018. The increase in liquidity along the forward curve allows for customers to better manage price movements during these times of high volatility,” he added.

Customer participation has risen significantly in 2019, with a record number of 120 companies utilizing the collateral efficiencies offered against other major crude oil benchmarks (WTI, Brent, Dubai, and Oman) within the CME clearing house where DME Contracts are settled.

DME has also enhanced its pricing mechanism by adding a new security measure — CME Group’s Velocity Logic — to the Exchange’s platform. Velocity Logic works to deter extreme price moves by detecting sharp price movements within a predefined time period and then briefly pausing the market to allow traders to reassess their positions.

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