The Department of Oil Affairs in the Government of Dubai has announced that it has notified its customers that the official price of Dubai crude oil for delivery next February will be US$0.50 less than the average daily settlement price of the Oman Crude Oil Financial Contract in Dubai Mercantile Exchange contracts traded over the next month.
Abdullah Abdul Karim, Director-General of the Department, told Emirates News Agency, WAM, that the department sets the price of Dubai crude oil in the markets in parallel with Oman oil prices, which reinforces the transparency of pricing process commitment and setting a fair value of crude oil in the Middle East.
The official monthly price of Dubai crude oil, with the transition to the pricing of futures contracts, is determined in advance, and a differential price is placed three months prior, "M-3", while the official final monthly price is determined at the end of the second month, "M-2".
DME Oman crude oil is considered a benchmark for pricing crude oil by the countries that produce it, and it gives them a differential price that reflects the quality of the product.
Every day at 12:30 p.m. Dubai time, Dubai Mercantile Exchange determines the daily settlement price of the Oman contract, which is the average price of transactions made in the five minutes from 12:25 p.m. to 12:30 p.m., Dubai time.
On the last circulating day of the month, the settlement's window lasts for thirty minutes from 12:00 p.m. until 12:30 p.m., Dubai time.