From Monday, Murban crude, trading under the symbol "ADM", will join the ranks of prominent oil price benchmarks Brent and West Texas Intermediate in a "new era" for global energy markets.

A light crude, which accounts for half of the UAE's oil production, Murban will have a contract for future delivery bought and sold on the ICE Futures Abu Dhabi exchange from Monday.

The exchange, run by Intercontinental Exchange (ICE) is a historic first for the Middle East, as Murban, the UAE's flagship crude grade, produced from onshore wells by the Abu Dhabi National Oil Company, is used to price and hedge oil being traded into Asian markets.

Writing in The National, Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, Adnoc managing director and group chief executive, said on Sunday, "a new era will begin for global oil markets, when the first Murban futures contract is sold on the opening day of trading on Ice Futures Abu Dhabi."

"Murban will be traded, and increasingly, when traders turn on their screens anywhere in the world, Murban will appear alongside its benchmark peers," he said.

The new Murban contract will be be based on a two-month delivery, with the first one for June delivery expiring at the end of April. From New York to Singapore, traders will be able to buy and sell Murban futures contracts, 22 hours a day, five days a week.

Two-thirds of global oil is traded in reference to the Brent benchmark, which is calculated on the basis of fields in the North Sea that are in decline. WTI, which tracks US crude grades, is more indicative of domestic supply and demand in the world's largest producer of oil and gas.

The Middle East accounts for the largest share of global production at 31.9 per cent, according to BP Statistical Review of World Energy 2020. The UAE, which is the third-largest producer within Opec accounts for nearly 4.2 per cent of global output.

Adnoc has been pushing for an international role for Murban, which flows at approximately 1.7 million barrels per day in the UAE, and is shipped to customers across Asia, including Japan, China and India. Global oil and gas companies as well as crude oil traders came together in 2019 to set up the international commodities exchange as a platform for Murban Futures. As part of this, Abu Dhabi reversed its retroactive pricing mechanism for crude last year and has now lifted restrictions on the resale of Murban bought on the market.

ICE Futures Abu Dhabi will be based at the Abu Dhabi Global Market, the capital's main financial centre.

Contracts traded at the Abu Dhabi exchange will be cleared at ICE Clear Europe alongside global benchmarks such as Brent, WTI, ICE Platts Dubai and ICE Low Sulphur Gasoil.

This article is reproduced at www.thenationalnews.com