Commodities and derivatives exchange NCDEX on Friday introduced India's first International Brent Crude Oil and Light Sweet Crude Oil futures contracts.
The contract integrates international price discovery markets with the Indian futures market and eliminates any currency distortion to provide a simple and perfect hedge option to domestic companies and value chain participants.
Since contract prices will be in tandem with international prices, the final settlement price will be simple and transparent, an exchange statement said here.
"India is the world's sixth largest consumer of oil and dependent on imports for supply. This unique contract will help oil companies hedge their price risk without the distortions created by currency fluctuations," NCDEX managing director and CEO Samir Shah said.
"We are, therefore, expecting healthy participation from physical market players."
As per the contract specifications, brent crude oil and light sweet crude oil contracts will have 100 barrels each as trading units and tick size (each tick is worth one cent for one stock) of Rs 1 each.
Both contracts will have delivery centre at Mumbai Port, JNPT.
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