Singapore Exchange to launch fuel oil futures in Jan

SINGAPORE, Nov 4 - Singapore Exchange <SGXL.SI> will launch its fuel oil futures contract in January 2010, Elena Sng, senior vice president for AsiaClear said on Wednesday, as it attempts to boost the city-state's role as a regional energy hub.

The contract, for the 380-centistoke grade or bunker fuel, with a size of 100 metric tonnes each, will be traded on a free-on-board (FOB) basis, the exchange said.

This means the cargoes can be loaded from any shore-based terminal in the city-state. Singapore is the world's third-largest oil trading hub and the largest bunker fuel port, with 3 million tonnes of marine fuel traded each month.

Sng was speaking at the Asia Pacific Petroleum Conference (APPEC).

The futures contract, a revival of a similar one operated in the early 1990s, will complement physical trading and boost risk management infrastructure in Singapore.

Singapore is looking to a liquid exchange to offer a relatively better regulated environment and a more transparent pricing mechanism, the head of International Enterprise (IE) had said. [ID:nSP213486]

Sng, who is Senior Vice President for Clearing and Commodities Business at SGX, had said the contract will offer market participants an efficient and transparent pricing mechanism in the Singapore fuel oil market.