The Dubai Mercantile Exchange (DME) expects to launch four new contracts this year which should help boost liquidity in its benchmark Oman crude, its chief executive at an energy summit.

The exchange launched the Oman contract in 2007, aiming to become the marker for the 12 million barrels per day of crude that move from the Middle East to Asia.

Trade volume has steadily risen since the launch, but is still only a third of the 10,000 contracts per day the exchange has pegged as the level for commercial success.

The four Oman and Brent crude related swap and options contracts would be launched as soon as the DME receives regulatory approval from the Commodity Futures Trading Commission (CFTC) in the United States, chief executive Thomas Leaver said.

'We're cautiously optimistic that we will hear any day now that we are good to go from their (CFTC) perspective, then we will go to our regulator the DFSA (Dubai Financial Services Authority) to get final approval,' he said.

After that, it would take around two weeks to get the contracts up and running, he said.

The process has taken longer than expected due to the CFTC's role in regulatory reform in the US market, Leaver said.

Swaps were likely to feed into increased volatility on the Oman contract on the exchange, Leaver said. Options were unlikely to trade until the exchange reached volume of 10,000 lots, but the DME would have them ready to trade anyway, he said.

The contracts would be an Oman swap, a Brent-Oman swap and European and Asian style options, he said.

The Oman contract on the fledgling exchange has traded an average of close to 3,000 contracts per day in the year to date, more than double the average volumes traded in 2008. But it would take time to reach the 10,000 mark, he said.

The exchange continues to lobby the world's top oil producers in the Middle East to use the Oman contract to prices its crude. That was key to boosting volume, as it would attract crude buyers that want to hedge their exposure to Middle East oil prices, Leaver said. The DME's most recent lobbying trip was to  Kuwait.

'Organic growth has been going well, the longer we are around the more accepted we become...the more people use it the more critical mass we get to grow', he said.

'We are encouraged by the number of extra companies that are getting involved, but we still have some way to go.'

Participation from non-commercial entities like hedge funds and algorithmic traders has helped to add slightly to the growing volume of contracts traded on the exchange, Leaver said.

The DME was on a 'sound cash footing', Leaver said, and he had no reason to believe DME shareholder Tatweer, a subsidiary of government-owned Dubai Holdings, was looking to divest its share in the exchange.

'I can tell you that there has been no discussions about it, and I would seriously doubt it,' he said. 'We have no debt... We are cash long, so the exchange is in an extremely good position contrary to what has gone on all around us in the global context.'-Reuters