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NCDEX seeks approval for furnace oil futures
 
NCDEX seeks approval for furnace oil futures
National Commodity and Derivatives has sought permission from the Forward Markets to launch futures trading in furnace oil. The multi-commodity exchange wants to do this because furnace oil, unlike other petroleum products like high speed diesel oil (HSD) and superior Keroscene oil (SKO),is freely priced in the country. It is freely exportable and importable under OGL (open general licence) too. Additionally the pricing of other heavy crude oil distillates like low sulphur heavy stock (LSHS) and residual fuel oil are based on furnace oil pricing. For running diesel generating sets about 13m tonnes of such oil are being consumed in the country annually . The oil used as a feed stock by industry is also known as a bunker fuel. Over-all ,furnace oil is known as fuel oil. The futures derivatives of the oil are being actively traded the Shanghai Futures Exchange. NCDEX official said" We want to introduce furnace oil on our futures trading platform to Provide Indian corporate opportunities to hedge their price risk on this fuel. Since bulk Of the oils total domestic production of 12m tonnes are being consumed internally, and Just 5% of the total requirements are being imported, Reserve Bank of India does not Allow Indian companies to hedge their price risks on foreign exchanges due to negligible Underlying exposures in physical import of the oil."
Posted On : 10/8/2005 2:55:19 PM

 
 
 
NCDEX seeks approval for furnace oil futures