Navitas to Price Marine Fuel in World Currency Unit
WDX Organisation, the company behind the World Currency Unit (Wocu), has signed an agreement with Navitas Resources, a specialist energy and climate commodity trade facilitator, where the new Navitas electronic exchange will price marine fuel (bunker fuel) in Wocu, alongside US dollar, from 2Q10. The agreement follows Navitas joining WDX’s early participation scheme earlier this year.
This will enable shipping companies to tender in either Wocu or US dollars for quotes at various ports around the world for marine fuel products and allow suppliers to place offers in the market 24/7.
The marine fuel market is around 200 million metric tonnes a year globally, valued at approximately US$100bn per year. Because the Wocu is a derivative of the exchange rates of the world’s top 20 economies (as measured by GDP), its use is expected to significantly reduce currency fluctuations compared to pricing in US dollar. It is anticipated that both consumer and producer will benefit from the smoothing effect of the Wocu, as the oil industry and consumers are exposed significantly to US dollar currency volatility.
Francesca Zerenghi, chief executive officer (CEO) of Navitas Resources, said: “We are taking a leading role in the development of non-US denominated commodity transactions. Both energy companies and developing countries with significant US dollar exposure will have the opportunity to reduce volatility in their earnings and balance sheet through the use of the Wocu. We became an early participation scheme member of the WDX Organisation, along with leading foreign exchange companies and securities firms, as we strongly believe that developing markets should have access to a trading platform where they can control their risk much more effectively. Reducing exchange rate fluctuation risk enhances this considerably. “