NSE to commence crude futures trading in May

India’s National Stock Exchange (NSE) is set to begin trading of rupee-denominated Nymex WTI crude oil and Henry Hub natural gas futures contracts in its commodity derivatives segment from 15 May.

The exchange received approval last month from the Securities and Exchange Board of India to launch the contracts.

For the WTI crude oil futures contract, the exchange has set 100 bl as the trading unit with a maximum order size of 10,000 bl, while the trading unit for the Henry Hub natural gas futures contract is 1,250mn Btu with a maximum order size of 60,000mn Btu, an official document showed.

Trading in these two segments will take place from Monday to Friday from 9am-11:55pm Indian standard time (3.30am-6:25pm GMT).

These futures contracts are designed to help market participants manage their price risk, the NSE previously said. This is especially important as India’s crude and natural gas import dependency is now over 80pc and above 50pc respectively.

India’s crude import dependency was at 87.2% of total consumption of 238.3mn t (5.23mn b/d) between April 2022 and February 2023, while its natural gas import dependency was at 44.6pc of total consumption of 55.54bn m³ during the same period, oil ministry data showed.

NSE had earlier signed a data licensing agreement with US-based exchange CME, allowing the bourse to list, trade, and settle rupee-denominated Nymex WTI crude oil and Henry Hub natural gas derivative contracts on its platform.

The bourse already has futures contracts for Brent crude oil, copper, gold, silver, and degummed soy oil.