Published On: Sat, May 8th, 2010

TOCOM Reopened Gas Oil Futures Contract

Tokyo Commodity Exchange, Inc. reopened the gas oil futures market and resumed trading May 6 at 9:00 JST. TOCOM listed the gas oil futures contract in September 2003 but suspended it in February 2006.

Akihiko Tembo, President of the Petroleum Association of Japan made the following comments on the reopening of the gas oil futures contract.

“TOCOM resumed the gas oil futures contract today after trading had been suspended since 2006. We had requested that the exchange restarts the contract in light of the highly volatile situation of the international oil industry as well as the oil distribution market in recent years.

With the reopening of the gas oil futures contract, all of the three main petroleum products, namely gasoline, kerosene and gas oil have become available for futures trading on TOCOM.

The contract specifications have been re-designed to enhance the convenience of trading by enabling distributors and commercial oil consumers, in addition to the oil refiners and their exclusive sales agents with certificates from local prefectural governments, to participate in the physical delivery process of gas oil.

Under this renewed framework, we think that the gas oil futures contract has good potential and we expect that higher liquidity will contribute to the formation of fair prices in a public market, as well as to the transparency of and confidence in the market.“

Tadashi Ezaki, President and CEO of TOCOM, made the following statement at the reopening ceremony this morning:

“I’d like to take this opportunity to thank all the concerned parties who have cooperated with us to make the reopening this morning of the gas oil futures trading on TOCOM possible.

We have vigorously worked on preparations to offer a gas oil futures contract in response to the growing needs of the industry in reflection of the drastic changes in the environment surrounding this commodity in Japan. We have re-designed the contract so as to make a wider group of commercial players able to participate in the delivery process, while ensuring effective measures are in place to prevent the evasion of taxes imposed on gas oil.

TOCOM will continue to make efforts to fulfill its important price formation function and to offer the ability to hedge the risk of price fluctuation.”

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