SGX reveals launch date for Middle East crude oil futures

The Singapore Exchange (SGX) and IE Singapore plan to launch the SGX Middle East crude oil (Meco) futures contract on the exchange's electronic trading system on November 12.

The contract's final settlement will be based on the monthly average of the daily Dubai and Oman crude oil prices assessed by New York-based commodity data provider Platts, a division of McGraw-Hill Companies.

The SGX Meco futures contract is being launched in cooperation with the Tokyo Commodity Exchange (Tocom), which has traded a similar yen-denominated Middle East crude oil futures contract since September 2001.

The SGX contract is also supported by IE Singapore, which administers the Global Trader Programme (GTP), under which more than 40 international oil-trading companies have chosen to conduct their trading activities out of Singapore.

"This initiative… will provide the oil community here with an additional trading and risk management tool to hedge against their exposures amid increasing uncertainties and volatility in oil prices,” said Lee Yi Shyan, chief executive of IE Singapore.

SGX Meco futures contracts will be sized at 1,000 barrels. Six consecutive contract months, starting from the December 2002 contract, will be listed for trading in November.

Ang Swee Tian, president of SGX, said the exchange hopes the contract will become a benchmark for regional and international oil participants to trade and hedge their exposure during the Asian, Middle Eastern and early European business hours.

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