DME holds roundtable for China teapots

01.06.16. Dubai Mercantile Exchange (DME) recently held a roundtable in Shandong, China that was attended by key Chinese independent oil refineries, the so-called teapot refineries.
The Chinese government is providing approvals to growing numbers of independents to import crude oil directly for the first time. The DME event was held to support these refineries in registering and setting up DME accounts to trade Oman Crude Oil Futures for hedging and deliveries.
The event was attended by more than 70 participants representing the majority of the independent refineries in China. To date, four refineries have registered and are ready to trade, of which one is already using the DME Oman contract for hedging and deliveries.
Eleven independent refineries from China have already been granted permission to import crude oil from overseas with more expected to receive approvals in the coming months.
In another move, DME has hosted the first trade in Middle East fuel oil derivatives.
DME recently listed Middle East 180cst and 380cst high-sulphur fuel oil (HSFO) for trading. The contracts settle against the MOPAG 180cst and MOPAG 380cst assessments provided by Platts.
The listing allows traders directly to hedge fuel oil delivered in the Gulf region and to trade the spread between the Middle East and Singapore fuel oil markets. DME said this is a significant step towards helping the Gulf realise its full potential as a refined product trading hub.
The trade was for 7,000 metric tons (approximately 45,000/barrels) of July 180 CST fuel oil (product code DHE) and was concluded between Vitol and Aegean Marine, one of the largest marine fuel operators in the Middle East. The transaction was brokered by the Dubai office of Freight Investor Services (FIS).