Days of Futures Past Episode 7 | Adi Imsirovic, Director at Surrey Clean Energy and Former Global Head of Oil Trading at Gazprom Marketing & Trading
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The IPE's Financial Settlement Mechanism
The International Petroleum Exchange introduced the Brent futures contract, now of course it's owned by ICE. The IPE went with this financially settled mechanism and you said a previously physically settled one didn't work. I traded DME, which is the CME contract in the Middle East, DME, Oman from day one until about 2020. One of the problems was always towards the expiry, it becomes extremely volatile,. It's a physical delivery contract, so you go along with Oman 500,000 barrels, and if you've got last 20,000 or 20,000 barrels to buy, on the last day and liquidity dries up.
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