UPDATE 2-Murban crude futures start trading at new ICE, Abu Dhabi exchange | Reuters
Abu Dhabi started trading Murban crude futures contracts on Monday, offering a potential rival benchmark for trading Middle East crude.
The key contract of the new ICE Futures Abu Dhabi (IFAD) oil exchange was priced at $63.18 per barrel as of 0900 GMT with 4,164 lots traded, ICE said on Twitter. Each lot is 1,000 barrels.
Abu Dhabi-based IFAD is backed by the Intercontinental Exchange Inc, Abu Dhabi National Oil Co (ADNOC) and partners including international oil majors.
“Starting today, Murban futures will be freely traded from Singapore to London, and from Abu Dhabi to New York,” ADNOC Chief Executive Sultan al-Jaber said at the launch event.
The Murban contract, which prices the flagship Abu Dhabi grade that accounts for more than half of ADNOC’s production, will offer an alternative benchmark to Dubai, operated by S&P Global Platts, and Oman crude futures traded on the Dubai Mercantile Exchange (DME).
The contract will enable traders to hedge Middle East crude and refining margins against the grade. It would also allow traders to compare the values of competing supplies from Russia, Europe and the United States with similar quality to Murban using a range of cash-settled derivatives against Brent, West Texas Intermediate.
The contract prices the crude two months ahead with the first expiry month set for June. It is a physically delivered contract with delivery at Fujairah in the United Arab Emirates on a free-on-board (FOB) basis.
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