UAE - Trade In Dubai Swaps\.

While the volume for spot trading in Dubai has been limited, swap deals in this crude oil have risen since 1997. These are contracts based on the future value of published price assessments, with the swap being one of the hedging tools.

Swaps are generally in small lots of 50,000 to 100,000 barrels or in lots as large as 500,000 to 1 million barrels. They relate to assessments over a calendar month (see APS survey on oil trading in Vols. 42 & 43).

Chinese traders began the trend for Dubai in 1997 as they took large positions to hedge their physical crude oil imports. They were followed by Shell, Vitol, Morgan Stanley and BP.