CME to Launch Sour Crude Contract

The Chicago Mercantile Exchange will list a "sour" crude oil contract by the end of January 2010.

"Sour" oil is crude with a high sulpher content. This sulpher needs to be removed before the oil can be refined into gasoline, heating oil, etc., and this causes sour oil to be worth less on the world market as it is more expensive to refine.

The existing oil contract traded on the CME's NYMEX division is not representative of most of the oil traded in the world as the NYMEX contract is based on "sweet" (low suplher content) oil. Most of the world's oil, including that produced in Saudi Arabia, is sour.

The Dubai Mercantile Exchange launched a sour crude contract earlier this year.