The expiry of the first Oman futures contract on the Dubai Mercantile Exchange (DME) will see four million barrels of Oman crude oil set for physical delivery, the exchange said.

The August DME Oman contract, the first for sour crude ever based in the Middle East, expired with an open interest of 4,000 contracts.
Only Nymex’s West Texas Intermediate (WTI) crude benchmark had recorded a higher volume of contracts going for physical delivery in January 1995, the DME said.
Traders said that physical delivery was widely expected since open interest remained high on the last day of trading of the contract.
Most traders said that physical delivery – which creates convergence between futures contracts and physical crude – makes DME’s Oman contract a more interesting option than ICE Dubai, launched in May, which is only cash-settled.
“The high number of contracts going for physical delivery in August certainly confirms the market’s need for a physically delivered rather than a financially settled crude oil futures contract,” Ahmad Sharaf, chairman of the DME, said in a statement.
Traders welcomed the large volume going through physical delivery but said DME’s battle was far from won, as trading volumes have significantly fallen in the past two months.
“It’s a good start, but the open interest for the following contract doesn’t seem to be taking off so far,” a trader with an investment bank said.
September DME Oman has so far little traded.
Traders said supporters of the DME, such as Vitol, whose head Ian Taylor has publicly backed the new exchange, and major players in Oman, such as Shell, which is the largest private equity owner of Oman, were likely to have respectively bought and sold Oman crude. But this could not be confirmed.