DME Announces First Fujairah Fuel Oil Trade
The very first trade in Middle East fuel oil derivatives has occurred at the DME, the leading east of Suez energy exchange.
DME just recently noted Middle East 180cst and 380cst high-sulfur fuel oil (HSFO) for trading. The fuel oil agreements settle versus the MOPAG 180cst and MOPAG 380cst assessments provided by price reporting firm Platts.
The listing enables traders to straight hedge fuel oil provided in the Gulf area and to trade the essential spread between the Middle East and Singapore fuel oil markets. This is a significant step towards helping the Gulf realize its full capacity as a refined item trading hub.
The trade was for 7,000 metric lots (appx 45,000/ barrels) of July 180 CST fuel oil (product code DHE) and was concluded in between Vitol, the world's largest independent energy trader, and Aegean Marine, a global marine fuel specialist and one of the biggest operators in the Middle East. The transaction was brokered by the Dubai workplace of Freight Investor Services (FIS).
Chris Bake, Member of the Executive Committee, Vitol stated: "Vitol is pleased to be part of the very first sell these brand-new DME contracts. Vitol is strongly dedicated to the advancement of the Fujairah oil center and this brand-new derivatives contract represents a big advance in Fujairah's advancement from a pure logistics hub into a major trading centre."
Owain Johnson, Managing Director, DME stated "In these volatile times, there is plainly a healthy appetite amongst regional market individuals for a method of handling price risk at Fujairah and the DME is happy to serve this market need."
FIS' Matt Stanley said: "FIS is delighted to have brokered the very first sell this new and possibly exciting market, which represents another first for FIS in commodity derivatives. FIS works consistently to support the development of new trading opportunities and through our local presence in Dubai, we have been carefully involved in making these new fuel oil agreements a reality. Fujairah has turned into one of the most essential trading hubs not simply within the AG region but internationally also. Providing the market the ability to hedge fuel oil that is priced on the basis of physical AG quotes will not just serve to handle threat for local traders however also aid arbitrage chances."
