NYMEX, UAE to Set Up Crude Oil Futures Market in Dubai
|Tuesday, October 19, 2004
The New York Mercantile Exchange is preparing to set up a futures exchange for crude oil and other commodities in Dubai jointly with the government of the United Arab Emirates, according to exchange officials.
NYMEX and the UAE government have exchanged a memorandum of understanding on the joint establishment of the new exchange, the officials said.
The Dubai Mercantile Exchange will have a trading floor and settlement functions and may also have training facilities for young people in the Middle East to get know-how of managing derivatives markets, they said. NYMEX will also offer trainings for them.
In addition to crude oil, the Dubai exchange will also trade in natural gas, electricity, aluminum and royal metals, the officials said.
NYMEX hopes a futures exchange in the oil-rich Middle East would attract merchandise firms, petroleum and gas companies and financial institutions not only from the region, where funds have built up amid rising crude oil prices, but also from the world at large, they said.
The Middle East has some 65 percent of global crude oil reserves and 40 percent of global natural gas reserves.
The Dubai Development and Investment Authority intends to introduce Western-style risk management know-how through the Dubai exchange, according to NYMEX officials.
The Dubai authority hopes the Dubai exchange would emerge as a major trading center in the Middle East by enhancing the leverage of the region in the world financial and commodities markets now dominated by the United States and Europe, they said.