India's National Commodity and Derivatives Exchange Ltd (NCDEX) will launch rupee-denominated Brent crude oil futures on Thursday, the exchange said.
The NCDEX, which has partnered with London's International Petroleum Exchange (IPE) and has 8,000 trading screens across India, becomes the second Indian exchange to offer oil contracts.
It hopes the contracts will be used by the local industry and other participants who deal in petroleum products to hedge their price risks, P.H. Ravikumar, managing director of the NCDEX, said.
The new contract will be traded in India and settled on its monthly expiry by reference to the IPE Brent index, he said after signing the partnership agreement with IPE.
IPE's chief executive Richard Ward said the London exchange wanted to globalise the Brent brand and offer it to brokers in Asian countries.
"India is the world's sixth largest consumer of oil and has a major price exposure to the Brent," he said.
India produces about 660,000 barrels per day of crude oil, which meets only 30 percent of its requirement. It currently consumes 2.7 million barrels of oil per day and 43 percent of its crude imports are Brent.
NCDEX's local rival, the Multi Commodity Exchange (MCX) offers monthly contracts for light, sweet crude, with trading lots of 100 barrels a day, but refiners have shown a lukewarm response.
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