Oil-Rich Abu Dhabi to Start Trading in Crude Futures From March - Bloomberg
Oil-rich Abu Dhabi will open a commodities exchange in March to rival those of Middle Eastern neighbors and allow investors to trade its crude using futures contracts for the first time.
The ICE Futures Abu Dhabi exchange will open on March 29 and offer contracts based on the emirate’s flagship Murban crude grade, pending regulatory approvals, Intercontinental Exchange Inc. said in a statement Monday. The Atlanta-based operator of trading and clearing platforms is setting up the exchange with government producer Abu Dhabi National Oil Co. and other oil suppliers.
Abu Dhabi is the capital of and holds most of the oil in the United Arab Emirates, the third-largest producer in OPEC. Murban crude, pumped from onshore fields, makes up more than half the sheikhdom’s crude output, now at around 2.6 million barrels daily.
By selling through futures, Abu Dhabi will let the market determine the price of its oil. It’s a significant change for a producer that until this year fixed its pricing retroactively, effectively telling buyers the cost of barrels purchased a month earlier.
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