In addition to the current MCX rupee–denominated, financially settled light sweet crude oil futures contract, which is one–tenth of the size of the NYMEX light sweet crude oil futures contract, the new licensing agreement includes rupee–denominated natural gas, heating oil, and gasoline futures contracts that MCX plans to launch. These new contracts will be financially settled by MCX based on the settlement prices for the corresponding physically settled NYMEX futures contracts and one–tenth of the size of the NYMEX contracts. The agreement also anticipates the launch of additional rupee–denominated contracts in RBOB gasoline and propane futures.
Celebrating the agreement, India's Union Minister of Agriculture, Consumer Affairs, Food & Public Distribution, Sharad Pawar, marked the commencement of trading with the traditional ringing of the opening bell at NYMEX in New York.
In October 2005, NYMEX and MCX signed a memorandum of understanding that allows MCX to use NYMEX settlement prices for its light sweet crude futures contract.
James E. Newsome, NYMEX President and Chief Executive Officer, said, "Our agreement with MCX will provide a benchmark price reference for risk management to the Indian energy sector, a significant user of such products from the global standpoint, while also optimizing the cost of such risk management."
Venkat Chary, Chairman of the MCX, added, "Producers, users and investors in India can take benefit from access to globally aligned prices and trading practices in such energy products. We proudly bring these products to the Indian industry."
Jignesh Shah, Managing Director and Chief Executive Officer of MCX said, "MCX will leverage its pan-India presence, and its member and client network spread across the country, to offer mini–NYMEX energy contracts to a range of stakeholders in the industry. It will also facilitate the price discovery of these products in the Indian time zone based on local fundamentals."