BSE has received markets regulator Sebi's approval to launch Oman Crude Oil contract on its newly launched commodity derivatives segment.
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.