Dubai: Riding on the high volatility of crude prices, Dubai Gold and Commodities Exchange (DGCX) plans to revitalise its energy product basket by adding two-three products in the third or the fourth quarter this year.

Currently, the exchange has only WTI crude futures, which has witnessed an uptick in volumes due to the massive gyrations in prices.

“We are working very closely [with] energy products due to volatility in prices. We are trying to revitalise our existing product portfolio and see if we can introduce some variations in our hydrocarbons products, probably a different size of WTI contract, relaunch of Fujairah fuel oil contract,” Gaurang Desai, Interim chief executive officer at DGCX, said.

“We are looking at all options, so possibly in the third or fourth quarter, we will have some development in this space,” he added.

DGCX is also talking to a number of industry participants to study market trends.

“We have started engaging with banks and industry participants within the region, looking at how trading patterns have changed, what are the good grades, [for instance] Fujairah fuel oil grade.”

More effort

“Our WTI volumes are up, and it’s a small base for us. Still we have seen 52 per cent increase in WTI futures,” he added.

The exchange records about 150-200 lots per day, where one lot is 1,000 barrels, in WTI futures currently.

“They have started to grow and that is also why we are increasing our efforts in this space,” Desai said.

“We do not want to launch hundred of products and spread our liquidity in that, we would launch one product and try to work in developing that product,” he added.

For example, DGCX carved out a special trading and compulsory delivery-based contract for plastics according to the need of the market participants.

“We launched a plastics contract, which was in few different dimensions, in which trading [w]as done in five metric tonnes and delivery was 25 metric tonnes to suit the need of physical logistics, but we have been learning from our experience that what people wanted [was a different] a deliverable contract and a trading contract,” Desai added.

The DGCX now has a mini-plastics cash-settled trading contract, and the existing plastics contract has been amended to make it a full-fledged deliverable contract, where trading and delivery are both done in 25 tonnes.

Meanwhile, the exchange also plans to list single stock futures to enhance equity product space.