DGCX to launch oil futures

Dubai Gold and Commodities Exchange (DGCX) will launch West Texas Intermediate (WTI) light sweet crude oil and Brent crude oil futures contracts on May 27.

This makes the world’s two most significant crude oil benchmarks available both to regional and international market participants under the regulatory and taxation regimes of the United Arab Emirates, said DGCX.

A fee waiver will be in place for the two contracts until August 26. They will trade from 0830 to 1130 local Dubai time (0430 to 0730 GMT). Contracts are 1,000 barrels in size and priced in dollars per barrel.

The DGCX contracts will start trading shortly before the Dubai Mercantile Exchange's (DME) new financially settled Brent and Oman crude futures launch on June 2. The DME already offers a physically settled Oman crude futures contract, which launched last year. Oman crude is a heavier, less refined crude than Brent or WTI.

Meanwhile, DGCX and the Shanghai Futures Exchange announced a strategic alliance on May 16 with the aim of building their derivatives expertise. The memorandum of understanding (MoU) will facilitate deeper co-operation in areas such as product development, clearing and technology.

The move follows MoUs signed between DGCX and Bursa Malaysia in January this year and between DGCX and Tokyo Commodity Exchange in August 2007.

See also: DME to launch new contracts