Besides the fact that it is THE luxury event of the yearMay 27, 2015 9:48
Forget Singapore: Dubai to be trade hub
Advocates point to expanding port capacity and firms boosting trading operations, while critics lament lack of regulation and transparency and say some companies still favour Singapore and Europe.
September 28, 2010 4:23 by Reuters
The increased amount of products is a challenge to the region’s big OPEC members, including Saudi Arabia, Iran and Kuwait. They effectively ban their customers from trading their crude, which is priced each month when the relevant authorities issue official selling prices.
The oil powers take a different view of refined products, such as gasoline, naphtha and diesel, which historically the Organization of the Petroleum Exporting Countries has not been able to influence.
There are, however, obstacles. The region lacks the regulations and transparency of mature trading hubs, but most importantly, dealers need to be able to hedge cargoes by using paper instruments, which are not established in the region.
“The paper market is almost not traded here. There is always a paper-side to it, but done in other markets like Singapore or London until more instruments are introduced in the Middle East to protect prices,” one trader said.
The so-called window is used by oil traders to post bids and offers made on the over-the-counter oil markets. For now there is no window in the Dubai time zone and there are no immediate plans for Platts to change that, the firm’s marketing department told Reuters.
Platts, a unit of U.S. McGraw-Hill Cos Inc, provides price benchmarks in a number of illiquid or opaque physical energy markets, often determining pricing through a series of bids, offers and trades during a half-hour “window”.
Futures trade on the NYMEX-backed Dubai Mercantile Exchange (DME), which launched its Oman futures contract in 2007, has repeatedly hit new records and earned praise from many traders. It has, however, shelved plans for a jet fuel contract.
“The DME for the past two years had its strategic focus on the DME Oman benchmark and was therefore not looking at other contracts or products,” the DME said.
Some traders have said they were pleasantly surprised by the success of the DME and Oman benchmarks. Others remain sceptical.
“We follow Singapore Platts and international markets,” said Naila Shirazee, manager of corporate excellence at Galana Petroleum, an oil company operating mainly in East Africa.