With the global energy trade flow shifting unprecedentedly, the Dubai Mercantile Exchange (DME) is poised to play a key role in serving Arab oil deliveries to East Asia, DME Chief Executive Officer Chris Fix told Xinhua in a recent interview.
In October 2012, the DME reported a 54-percent month-on-month rise in trading, as 37,617 DME Oman Oil contracts changed hands, " mostly because of the growing energy needs in Asia," said Fix. The record month of October even topped the last record month of April 2012 by 12 percent.
A forcast published earlier this week by the International Energy Agency (IEA) said the United States will replace Saudi Arabia as the world's largest oil producer by 2020. While the United States is on the way to oil-self sufficiency, physical energy flows from the Middle East to East Asia are on the rise.
The IEA scenario puts the DME even closer to the Eastern hemisphere, as Asia is far from being self-sufficient on oil. According to Fix, energy-related firms from China are already the DME's largest market participants by generated volumes with distinct.
Oil-related firms, such as refineries or petrochemicals producers, use futures in order to hedge themselves against price fluctuations of the "black gold".
Because oil supply disruptions in the United States, such as the devastating Hurricane Sandy, which caused 50 billion U.S. dollars worth of damage at the end of October, the DME developed its own benchmark contract -- the DME Oman Crude Oil futures.
The vast majority of traders at the DME are based in the geographical region of "East of Suez". The DME is the only oil future market by international standards in the time zone between Europe and East Asia.
Fix refused to comment recent media reports that the DME's largest shareholder CME Group from the United States, which holds a 50-percent stake in the DME, was unhappy with the "slow progress. " However, he affirmed that the Dubai-based futures exchange has not reached its full potential yet.
Meanwhile, Fix said the DME was not designed to solely serve the East. "I've learnt that there is tremendous interest of Western Europe and North America in the DME's activity," said Fix, making it clear that the DME will not neglect other countries. Endi