The Monetary Authority of Singapore has given a green light to the Dubai Gold and Commodities Exchange (DGCX) to market its new crude contracts directly to traders in the Asian oil trading hub, the DGCX said on Monday.
The DGCX will list two cash-settled light sweet crude oil contracts in the world's top oil exporting region on May 27.
The MAS' regulatory approval enables the Dubai bourse to offer its new contracts directly to professional and accredited investors in Singapore, DGCX's Chief Executive Malcolm Wall Morris said.
"This approval is crucial for the exchange and will help boost liquidity for the new contracts," Wall Morris said.
"Since last week we have received inquiries from major investment banks, proprietary groups and international oil companies which showed interest in trading the contracts," he told Reuters.
Listing contracts in Dubai would allow funds in the region to invest in oil futures without taking money elsewhere, DGCX has said.
One of the contracts would be equivalent to US benchmark West Texas Intermediate crude, as listed on the New York Mercantile Exchange (NYMEX).
The other would be equivalent to European benchmark Brent crude, as listed on the Intercontinental Exchange (ICE).
The contracts will trade from 0430 GMT to 1930 GMT.
The NYMEX is a backer of DGCX rival the Dubai Mercantile Exchange (DME), which launched a sour Middle East crude contract in June 2007.
That contract has survived longer than many past attempts to launch Middle East crude contracts, but has yet to establish itself as a viable vehicle for hedging and speculation.
The DME will also launch two new cash-settled crude futures contracts for Brent and Oman crude on June 2, hoping to attract more financial players.
Both DGCX and DME are competing for potential new markets for energy futures in the region. The DME is working on a jet fuel contract.
The Dubai Multi Commodities Centre (DMCC), which owns a majority stake in the DGCX, said in November it was planning to launch a liquefied natural gas (LNG) futures contract.
DGCX tried to launch a fuel oil contract in October 2006.