Trading firms launch Internet oil futures exchange

Trading firms launch Internet oil futures exchange

A consortium of major Japanese oil companies and trading houses have joined forces to launch J Oil Exchange (JOX), an Internet-based trading system for oil product futures.

The online exchange will be based offshore in Singapore and thus freed from Japanese regulations on commodity exchanges. Company officials say the exchange will have a capitalisation of about Y400 million. Trading is expected to start in July.

The new marketplace will aim to provide low-cost hedging tools for companies dealing in oil products.

Companies participating in the joint venture include oil companies Idemitsu Kosan, Showa Shell Sekiyu, Cosmo Oil, Japan Energy; trading houses Mitsubishi, Mitsui, Sumitomo, Itochu, Marubeni, Nissho Iwai and Kanematsu. Non-Japanese participants include Morgan Stanley Dean Witter, Goldman Sachs, Vitol and SK.

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