China based energy exchange, the Shanghai International Energy Exchange Corporation (INE), and Dubai Mercantile Exchange, DME, the international energy futures and commodities exchange in the Middle East, today announced the signing of a Memorandum of Understanding (MoU) to strengthen their cooperation in promoting the development of crude oil futures.
INE plans to launch a crude oil futures contract based on the import price in China of medium-sour crude oil. The new contract will be correlated with DME’s flagship DME Oman Crude Oil Futures Contract (DME Oman), which represents the export price of crude oil from the Middle East.
The two exchanges signed the agreement following a joint seminar held at the Dubai International Financial Center (DIFC), which was attended by a large number of institutional participants.
During the event in Dubai, senior officials from both exchanges discussed the specifications of their crude oil futures contracts and their cooperation plans. INE and DME will hold a second seminar in Shanghai on 21st November.
Under the terms of today’s agreement, INE and DME will explore several areas of cooperation including joint education activities and collaboration to promote crude oil benchmarks in the Middle East and Asia-Pacific.
Chu Juehai, Chief Executive of INE, said, “As INE moves closer to the launch of crude oil futures trading we are excited to announce this cooperation agreement with DME, which is an exchange with a strong track record in physically backed crude oil futures. This is another step towards INE’s objectives, which are to provide a market platform for energy derivatives that objectively reflects the energy supply-demand balance in Asia-Pacific and to improve the efficiency of price discovery, risk management and asset management for the oil industry and global participants.” Christopher Fix, Chief Executive Officer of DME, said, “This MoU with INE reflects DME’s determination to build a tighter relationship with our Asian customer base and to support the development of energy trading benchmarks within Asia. DME and INE are at the heart of the ‘New Silk Road’ between the Middle East and China, which is increasingly the key market for global crude oil, and we are excited about the opportunities that will arise once INE launches their eagerly awaited crude oil futures contract.”
Source : WAM News Agency for United Arab Emirates
