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India : BSE gets SEBI nod to launch Oman Crude Oil contract in commodities
Publish Date : 30-Oct-2018
Asias oldest exchange and now the worlds fastest exchange with the speed of 6 microseconds, has received markets regulator Sebis approval to launch Oman Crude Oil contract on its newly launched commodity derivatives segment.
BSE had marked its entry into the commodity derivatives segment with gold and silver contracts on October 1, 2018 and became Indias first universal stock exchange with all assets classes including equity, mutual funds, currency and commodity in its portfolio.
Shri Ashishkumar Chauhan, BSE MD & CEO said, BSE believes in systematic development of market through product innovation, awareness and research with a view to provide a wider product range to the market participants.
The BSE Oman Crude Oil Futures Contract will be settled on Dubai Mercantile Exchange Oman Crude Oil prices on the expiry day. BSE recently entered into an agreement with Dubai Mercantile Exchange (DMX) a premier energy-focused commodities exchange in the Middle East, for the growth and systematic development of commodity derivatives markets in the Crude Oil Complex.
The Oman Crude Oil is medium sour crude. As per market survey, most of the Indian oil producers and consumers are now taking spot price of Oman oil as the benchmark for trade. The average deliverable supply of Oman Crude in the past 5 years was INR 218,571 Crore. Oman Crude Oil is having high correlation with other variants of crude oil such as WTI, Brent, Dubai variant, etc. For instance, the correlation between Oman crude and WTI is ~0.99 while between Oman and Brent is ~1.0. Further, the composition of Indian crude basket represents average of Oman and Dubai (sour) and sweet crude oil prices in the ratio of 73:27 in 2017-18. The annualized volatility of Oman is 37% in the last 3 years.
