The Dubai Mercantile Exchange plans to ask crude buyers in Asia to lobby Saudi Arabia and other oil producers in the Persian Gulf to adopt its Oman crude futures contract as a benchmark for their official selling prices.
Adoption of the contract as a benchmark must be “customer- driven,” Kendal Vroman, managing director for commodity products at CME Group Inc. (CME), said in Dubai. Chicago-based CME, which last month doubled its stake in the Dubai exchange to 50 percent, will use its sales and marketing team in Asia to promote the Oman contract as a hedging tool, he said.
The energy-focused DME has been seeking to establish the Oman contract, which gives investors the option of taking physical deliveries of crude, as the pricing standard for oil sales to Asia. The exchange hopes that by boosting its trading volume it can persuade buyers of Middle Eastern oil to tell producers that the Oman contract would be their best benchmark for crude sold under long-term contracts, Vroman and DME Chairman Ahmad Sharaf told reporters at a briefing in Dubai.
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