Production from the new oilfield discovered in Dubai will help boost volumes at Dubai Mercantile Exchange (DME), said the exchange's CEO Thomas Leaver.
Production at the oilfield is expected to begin a year from now.
"While it is too early to estimate the size of the discovery, any increase in production will have a corresponding and positive impact on DME volumes," said Leaver.
An average of 3,000 to 3,500 contracts (each contract equals 1,000 barrels of oil) have been traded at the exchange for the past two-and-a-half months.
Dubai-based oil analysts said they expected the oil find to strengthen DME volumes considering the impact the June 2009 announcement by the Dubai Department of Petroleum Affairs (DPA), that it would set the official selling price (OSP) for the emirate's crude based on a differential to DME Oman contract, had on volumes. The DPA announcement, along with several other developments at DME, helped the exchange register a 69 per cent year-on-year increase in volume in 2009.
"It [the new production] will certainly be a shot in the arm for DME," said an analyst.
"The adoption of DME Oman as the basis for setting the OSP for Dubai crude by the DPA further reinforces the growing acceptance of the DME Oman contract as the third global crude oil pricing benchmark," Leaver was quoted as saying in a 2009 review report that detailed on reasons for the rise in volume at the exchange.
Energy information provider Platts says Dubai's crude output is below 100,000 barrels a day. Citing trade estimates, Reuters says it is between 50,000 and 70,000 barrels a day. The output is used as a pricing benchmark for about 11 million barrels per day of crude heading to Asia from the Middle East. The UAE, which is the world's third largest oil exporter, has an output of 2.3 million barrels a day.
Dubai Petroleum Establishment, which is responsible for oil production in Dubai, declined to specify the size or location of the new field. Petrofac, the London-based company that operates Dubai's offshore oilfields, declined to comment.
The oilfield was discovered to the east of Rashid oilfield, one of four that produce most of the emirate's crude, Reuters said. The oilfield is expected to produce about 10,000 barrels a day, Reuters reported quoting industry sources. Dubai's three other main producing oilfields are Fateh, southwest Fateh and Falah.
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.