China pushes to launch crude oil futures this year
Source: www.chinamining.org Citation: Reuters Date: July 12, 2017
China has opened more than 6,000 trading accounts for its long-awaited crude futures contract - with three-quarters coming from individual traders - as it pushes ahead with plans to compete with global pricing benchmarks.
China`s oil majors and about 150 brokerages have also registered, but the strong interest by "mom-and-pop" investors looks set to mark out China`s crude futures from Western counterparts, which are dominated by institutional investors.
Shanghai International Energy Exchange (INE), which will run China`s contract, says it is finalizing technical issues. The contract has faced years of delays and there is still no set date, but INE and also trading participants now say a launch this year is almost certain.
"The INE is striving to launch the crude oil futures this year," a spokeswoman said, adding that the exchange has conducted four trials to ensure it is technically ready.
Oil futures trading volume is small during Asian hours despite the region`s role as the world`s top consumer.
Shanghai`s crude futures are aimed at giving China more clout in pricing crude in Asia and a share of the trillions of dollars in oil futures trade.
The INE hopes to attract foreign investors, and locally registered entities of JPMorgan and UBS are among those registered, although international players have raised concerns, including over trading being denominated in yuan, which may dampen early take-up.
Most oil trades are priced off two crude derivatives, US West Texas Intermediate and London`s Brent, traded on the Intercontinental Exchange and the New York Mercantile Exchange owned by CME Group.
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