The Dubai Mercantile Exchange Limited (DME) has completed its first month of trading on an historic note.

To mark the event, DME released a few key statistics. The first trading month of the Oman Crude Oil Futures Contract saw impressive contract volumes with a total of 4,000 contracts, equivalent to 4,000,000 barrels of crude oil going for physical delivery in August.

This exceptionally high number of contracts going for physical delivery has only been exceeded once before, by NYMEX's WTI benchmark in January 1995.

The Exchange reported a total of 58,365 contracts traded during June, of which 39,571 were Oman Crude Oil Futures Contracts (OQ), 7,332 WTI-Oman Financial Spread Contracts (QW) and 11,462 Brent-Oman Financial Spread Contracts (QN).

The total volume of traded Oman Crude Oil Futures Contracts is equivalent to 39,571,000 barrels of crude oil. The size of the Middle East's first and only physically-backed energy futures contract is 1,000 barrels per contract.

At the termination of trading on June 29, Exchange-wide Open Interest for all three listed contracts was 6,660, of which 6,467 was Oman Crude Oil Futures Contract (OQ), 15 WTI-Oman Financial Spread Contract (QW) and 178 Brent-Oman Financial Spread Contract (QN).

'It has been a truly exciting time since our launch on June 1, and we are very pleased with the overall number of contracts traded and the high levels of open interest. The high number of contracts going for physical delivery in August certainly confirms the market's need for a physically delivered rather than a financially settled crude oil futures contract,' said chairman of DME Ahmad Sharaf.

'The backing we have received from both the Oman and Dubai governments in adopting forward pricing of their crude oil has been instrumental in this,' he added.

'We have now been through one full cycle of trading and can already see some very encouraging trends in the market. We see strong evidence that traders are using the contracts as a tool to hedge their price risk,' said CEO of DME Gary King.

The Ministry of Oil and Gas of the Sultanate of Oman officially informed its customers that the first Official Selling Price (OSP) for their August Crude Oil cargoes is $66.05 per barrel.

The OSP represents the arithmetic average of the daily settlement prices over the month of June for the August Oman Crude Oil Futures Contract listed on the DME and marks the first ever forward pricing of Omani crude oil.

In a landmark decision announced in November of last year, the Sultanate of Oman decided to adopt forward pricing of its crude oil based on DME settlement prices. The ground-breaking decision to abandon its past practice of retroactively pricing the Sultanate's crude oil is further evidence of the Oman Government's continuing support for price transparency and obtaining fair value for its Middle East sour crude oil.

August Oman Crude Oil Futures Contracts expired on June 29 at 4.30pm Singapore time (12:30pm Dubai time). Matching procedures and notifications commenced at 3:00pm New York time on July 2 and customers have been notified of their counter party by their Clearing Members.

Physical delivery will begin in August 2007. The contract is delivered through the Mina Al Fahal crude oil storage and loading facilities in the Sultanate of Oman.

This is seen as a further milestone for the Exchange as it will confirm the market's confidence in the physically delivered Oman Crude Oil Futures Contract.Trade Arabia News Service