DUBAI // The Dubai Mercantile Exchange (DME) on Tuesday said it had suspended the membership of Lehman Brothers' Dubai unit. The DME was the latest commodities and energy exchange to suspend Lehman from trading after the bank sought bankruptcy protection on Monday. The suspension was unlikely to have much impact on trade volumes in Oman oil futures on the DME as Lehman was a relatively small player, traders said.
The Dubai exchange declined to give further details on Lehman's role in Oman futures trade. "The DME has a wide and varied membership base and does not comment on the trading activity or impact of an individual member," a DME spokesperson said. The DME suspended Lehman Brothers International (Europe) DIFC branch, a floor member of the DME. The DME declined to comment on the status of Lehman Brothers Inc, which is a clearing member of the exchange.
The shake-up of some of Wall Street's biggest firms over the weekend may actually help liquidity on the DME, one trader said. Bank of America will become a member of the DME through its deal to buy Merrill Lynch . "That may give BofA some incentive to become a market maker on the DME," said one trader. Bank of America has concentrated its energy trading activity on paper markets elsewhere. The DME launched its Oman OQc1 contract to last year as the first Middle East sour crude futures contract to have the backing of oil producers. The governments of both Oman and Dubai are shareholders. The New York Mercantile Exchange is also a shareholder.
The contract has outlasted previous attempts to launch sour crude contracts but is still struggling to attract volume.
