May 17 (Reuters) - ICE Futures ICE.N, host of the European benchmark London Brent futures contract, will launch trade of Dubai sour crude futures at 0600 Singapore time on Monday (2300 GMT on Sunday).
Just 11 days later, the Dubai Mercantile Exchange plans to launch trade of its Oman sour crude contract. The DME is backed by ICE rival the New York Mercantile Exchange (NYMEX).
The two exchanges hosting the world’s leading oil futures contracts are racing to establish a dominant contract linked to the Middle East sour crude market. (To see a story, please click on [ID:nL17318200]).
Below are previous attempts to launch sour crude oil contracts.
SIMEX - The Singapore International Monetary Exchange (SIMEX) launched the world’s first sour crude oil futures in June 1990. After suffering from lack of trades for many months, the Dubai futures contract was terminated in Feb. 1992. SIMEX officials said the launch had been badly timed, not giving it sufficient time to build up liquidity before being overtaken by events in the Gulf crisis.
IPE - The International Petroleum Exchange’s (IPE) July 1990 launch of a sour crude contract based on Dubai crude just prior to the Gulf crisis proved ill-fated, as forward interest in Dubai dried up with the embargo on Iraqi and Kuwaiti crude. The contract, which was last traded in May 1991, was terminated in Nov. 1992. In 2001, ICE acquired the International Petroleum Exchange (IPE).
NYMEX - The New York Mercantile Exchange’s (NYMEX) sour crude futures allowing for physical delivery of several streams of domestic and international crude were launched in Feb. 1992 but failed to attract trader interest. The exchange blamed the contract’s illiquidity on the nature of the underlying cash market.
TOCOM - Tokyo Commodities Exchange has a long-existing Middle East crude oil futures contract priced in Yen in a locals-only market. The contract is based on the average Oman/Dubai crude price published by pricing agency Platts. Liquidity and open interest are falling.
NYMEX - Middle East sour crude oil futures contract based on the Oman/Dubai crude price was terminated in April 2001, only traded for the first two days after it was introduced in May 2000.
Singapore Exchange - The Singapore Exchange launched a sour crude futures contract in Nov. 2002 settled against the Oman/Dubai crude price. Later agreed to work with TOCOM in a failed attempt to increase liquidity.
NYMEX - Launched its physically settled futures contract for Russia’s main blend of exported crude oil (REBCO) -- commonly known as Urals -- in October 2006 to trade on the Chicago Mercantile Exchange’s Globex electronic trading platform but has failed to attract interest.
The Russian Trading System - Launched its own domestic Urals contract in June 2006, but has failed to attract much activity.
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