Under the terms of the agreement, NCDEX has launched a rupee-denominated Brent crude futures contract to be traded on NCDEX in India and settled on its monthly expiry with reference to the IPE Brent Index. The contract will be traded and cleared exclusively on NCDEX. As part of the agreement, the IPE will make available its real-time prices on all NCDEX trading screens in India (currently over 6500).
The occasion was graced by dignitaries from various fields like Mr. B. V. Bhargava, Chairman, CRISIL, Mr. Ajay Shah, Consultant, Department of Economic Affairs, Ministry of Finance, Mr. Rajiv Agarwal, Member, Forward Markets Commission, Mr. Marc Leppard, Director, Regulation & Compliance, IPE among others. On the occasion, Mr. Sundareshan not only complimented NCDEX on its achievements but gave valuable insights & suggestions for the betterment of commodity futures market in India.
Dr. Richard Ward on this occasion said “The IPE’s Brent Crude futures contract is a global benchmark for pricing of the world’s oil. We are delighted to enter into this co-operative venture with NCDEX which we believe will reinforce the significance of the Brent Crude futures contract.”
Mr. P H Ravikumar added “The tie-up with IPE represents a significant step in integrating the Indian energy markets with the international markets. The NCDEX IPE Brent Crude Futures contract offers an extremely useful and effective hedging tool for Indian participants with energy related price risks.” He made a very insightful presentation on trading in Brent Crude.
Mr. Narendra Gupta, Chief Business Officer, NCDEX Limited, said, “The NCDEX IPE Brent Crude futures contract is a major milestone in the evolution of commodity markets in the country as crude oil is one of the most important commodities that affect people all over the world. Having such a contract in India which mirrors global developments is just what is needed given the uncertainties in Global Oil Economics”. Advantages of the NCDEX IPE Brent Crude Oil Futures Contracts:
- The final settlement price (FSP) of the contract would be completely transparent since it would be Brent Index Price; the price at which Brent futures at IPE is settled.
- The real time prices for the three forward months being traded at IPE will be displayed on the NCDEX trading terminal for the convenience of participants.
- The expiry date of the contract will be the same day as it is there at IPE. The settlement price will be officially taken from IPE.
- Longer trading time will be possible as IPE opens by 1:00 noon Indian time compared to US exchanges which opens in the evening (by Indian time)
- Arbitrage opportunities are possible between IPE & NCDEX Brent contract & between Brent & WTI contracts.
- The unit of trading for the product is 100 barrels with the delivery unit being 50,000 barrels
- The tick size is Rs 0.50.
- The price basis is Sullom Voe, Shetland Islands & United Kingdom & is exclusive of all levies & taxes.
- While the price limit is set at 6%, the position limit is 6,00,000 barrels for Member & 1,50,000 barrels for Client.
- The initial margin applicable for the contract is 2.5% with an exposure margin of 3.55.
- The delivery centre is Mumbai port/JNPT
