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DME sets new record high for physical Oman crude delivery in July

https://www.chemnet.com   Aug 05,2010
The Dubai Mercantile Exchange said Wednesday it set a new record last month for the physical delivery of Oman crude cargoes in September at 15.1million barrels, surpassing the previous high of 14.1 million barrels in June.


This would equate to 30 cargoes of 500,000 barrels each.


Total open interest on futures contracts between September 2010 and June 2012 reached a record 20,160 lots last month, exceeding the last high of 19,867 lots in February. Each lot is 1,000 barrels.


Despite the higher liquidity, prices of September Oman crude oil futures were erratic last month. On the last trading day of July, the settlement price was $72.61/b, which would equate to September Dubai swaps minus $2.45/b. Just a day ago, the settlement price was at $73.09/b, or September Dubai swaps minus $1.67/b. Physical cargoes of Oman for September loading traded around Dubai swaps minus $1.40-1.50/b then.


Sources said the price slump on July 30 was due to extensive liquidation of long positions as traders attempted to square off all exposures before the September contract rolled off the board.


Shell and Unipec have traditionally been the biggest sellers on the DME, alongside Oman Trading International, Japanese companies such as Itochu and
Sumitomo, and trader Vitol. Buyers include trading companies like Petraco, Mercuria and Phibro.


The New York Mercantile Exchange, Dubai investment company Tatweer, and the Oman Investment Fund each hold a 25% stake on the DME. Goldman Sachs, Morgan Stanley, Vitol, Concord Energy, Casa Energy Trading and Shell hold a combined 20%, while floor members hold a 5% equity of the exchange.


The DME is currently in formal dispute resolution proceedings with one of its shareholders, Casa Trading, after the exchange terminated Casa's membership.
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