Home | FAQs | DME Oman Crude Oil Futures Contract (OQ)

Last Updated: 11/11/2008

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• DME Oman Crude Oil Futures Contract (OQ)
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• DME Oman Crude Oil Financial Contract (ZG)
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Q. What is the DME Oman Crude Oil Futures Contract size?
A. The contract size is 1,000 barrels. The contract size is consistent with other exchange traded crude oil benchmark contracts, Brent and West Texas Intermediate (WTI).

Q. What are the contract trading months?
A. The current year and the next five years. A new calendar year will be added following the termination of trading in the December contract of the current year.

Q. Is the DME Oman Crude Oil Futures Contract physically delivered or financially settled?
A. The contract is physically delivered at the Mina al Fahal crude oil loading facilities in Oman. However, like all Exchange traded futures contracts, market participants have the ability to close positions prior to expiration. A financially settled Oman contract, the DME Oman Crude Oil Financial Contract is also available for trading on the DME.

Q. How is the Monthly OSP calculated and what is it used for?
A. The monthly OSP is calculated by the straight average of the daily DME Settlement Prices for each trading day during the month. The Ministry of Oil & Gas in Oman uses the OSP to price their term contracts.

Q. What are the Price Fluctuation Limits and Price Limits for the DME Oman Crude Oil Futures Contract?
A. The minimum price fluctuation is 1 cent ($0.01) per barrel. There is no maximum price fluctuation limits.

Q. How does the matching of participants in the physical delivery process take place?
A. All delivery matching is undertaken by the NYMEX Clearing House, based on Clearing House notices of intention to receive or deliver crude oil. For more details, please refer to the procedures for physical delivery mechanism in the DME Rulebook Chapter 10. In addition, the DME has prepared a guide to the settlement and delivery mechanism, which can be found here.

Q. Is all of Oman’s oil available for delivery into the contract or is some still under long term supply contracts?
A. Both primary (term) and secondary (spot) contract holders price their oil purchases and sales based on DME settlements. Therefore all oil delivered through the terminal is priced using DME irrespective of whether it is term or spot.

Q. Does the DME take alternative grades for delivery?
A. The DME does not have alternative grades for delivery, but if buyer and seller agree, they can enter into an Alternative Delivery Procedure (ADP) more details of which are in the DME Rulebook, Rule 10.14.  An ADP can take place once the contract expires and matching has taken place.