undergroundnewsroom.com
undergroundnewsroom.com April 22, 2018


China launches crude oil futures trading

28 March 2018, 01:09 | Gordon Grant

Shanghai crude oil futures roar into action

China's first oil futures off to a flying start as Beijing vies for pricing power

The world's biggest oil buyer is offering yuan-denominated futures that foreigners can buy and sell - a first in Chinese commodities.

Nearly 40.7 million barrels of oil changed hands via the September contract during Monday's five-hour session, according to data from the Shanghai Futures Exchange.

China's desire to open a domestic market to trade futures has grown as the country's crude imports have boomed.

Futures contracts allow investors to hedge exposure to physical prices, and offering them in yuan could allow energy-hungry China - which previous year surpassed the United States as the world's largest crude importer - to exercise more control over prices of the type of oil it consumes most.

About 413 participants joined the bid collection session in the morning, which include state-owned oil companies - Unipec, CNOOC, Sinochem, Northern Petroleum, independent oil companies and refineries Twinace, Shandong Wonfull, and foreign oil trading companies Trafigura, Glencore, and Freepoint, according to local media.

The number of active USA oil rigs rose to a three-year high of 804 last week, implying further rises in future production.

That's different to global exchanges, like the CME, which uses a ratio based on an investor's traded volume.

LONDON, March 26 (Reuters) - Crude oil futures slipped on Monday, but losses were capped by a rebound in stock markets and escalating Saudi-Iran tensions.

Tesla is rallying ahead of a shareholder vote on Elon Musk's compensation
Ultimately, Musk could earn up to US$55.8 billion in stock and awards, if Tesla's market cap reaches US$650 billion. Institutional Shareholder Services and Glass Lewis both peg the current value of Musk's package at $3.7 billion.

Moscow slams United Kingdom as European Union recalls bloc's envoy
Friday also marked the day when 23 British diplomats and their families in Russian Federation were forced to leave the country. British Prime Minister Theresa May arriving for the second day of the European Council's Spring meeting in Brussels, Belgium.

First nonstop Australia to London flight touches down
The new Qantas service is part of the airline's plans to eventually connect Europe with airports on Australia's east coast. It also has a customised menu to help travellers cope with jetlag, including a bedtime drink of hot chocolate.

Brent and WTI, in contrast, were down by that time, weighed down by concerns over a looming USA trade dispute with China. The contract amount is 1,000 barrels, the Exchange reports.

Shanghai Crude aims to rival the world's two crude benchmarks, luring overseas traders with the promise of a deep pool of liquidity and the chance for arbitrage between Asian, U.S. and European markets.

The contract for delivery in September opened about 6 per cent higher at 440.20 yuan (US$69.70) a barrel at 9:01am.

Skeptics argue that hurdles such as capital controls, regulatory risk and market intervention in other Chinese securities have made investors cynical about the prospect of Shanghai futures becoming a regional price-setter. By 11:14 a.m. (0314 GMT), 3,599 lots of the most-active June contract had traded, equivalent to 3.6 million barrels of crude.

Analysts said the market's current strength may not last.

These and other factors mean the contract may have a "hard time" building correlations with Brent and WTI that would make arbitrage possible, said Albert Helmig, chief executive of financial consultancy Grey House and a former vice chairman of NYMEX.

Once the exchange has established the prices of marker crude oil grades in China, these prices would have to be reflected in prices offered by suppliers in the Middle East and USA.



Other News

Trending Now

Paris attacker's friend held; death toll now four
The suspect also killed one person earlier in the day while stealing a vehicle , CNN and other news organizations reported. It wasn't clear whether the knife and handgun found were the weapons he wielded when entering the supermarket .

Paul Ince Gives Advice to Liverpool Star Amid Speculat Over Forward's Future
He said: " Mohamed Salah would be foolish to leave Liverpool right now, he's in a place which is the ideal fit for him". The Egyptian scored during a 2-1 defeat to Portugal last night.

March Against School Gun Violence Held In Sonora
Over the last few weeks, I participated in my school's walkout to honor the victims of gun violence. The movement they are leading, which mushroomed after the recent school shooting in Parkland, Fl.

Eden Hazard will consider Chelsea future after the World Cup
Hazard's rumoured unhappiness with Chelsea's tactics has fuelled speculation he could leave Stamford Bridge at the end of the season.

Lake Arthur woman accused of shoving down woman holding 7-month-old
A 22-year-old Afghan mother's photo has surfaced online who can be seen breastfeeding her baby while taking an entrance exam. Jahan Taab was photographed sitting on the floor at a private university in Afghanistan's Daykundi province .

Winter storm watch issued for weekend
Mixed precipitation is expected locally, with 1 to 3 inches of snow expected along Interstate 74 (including Bloomington-Normal). Kennedy International, LaGuardia and Newark Liberty International airports, where about 70% of flights were canceled.

Breakingļ¼šBoko Haram 'Returning Christian Girl to Dapchi
Her freed schoolmates have been telling her parents she refused to convert to Islam , at the insistence of Boko Haram . Nigerian president Muhammadu Buhari on Friday hosted the recently released Dapchi girls at the presidency in Abuja .

Michigan Basketball wins ugly against Florida, but is headed to Final Four
Two transition buckets pushed it to 38-28 at 14:30, and the Staples Center exploded, forcing another Florida State timeout. MI held off a late Florida State rally and hung on for a 58-54 win over Florida State in the West Regional Semifinal.

Zuckerberg says sorry to Britons with newspaper apology ads
The letter concludes by thanking users for "believing" in the Facebook community: "I promise to do better for you". If it finds other offenders, it will "ban them and tell everyone affected".

Iowa family reported missing in Mexico found dead in condominium
Soon after the post went viral, authorities in Creston, Iowa, announced that they received notification from the U.S. Creston authorities validated they had actually passed away in their trip condo in Akumal, Mexico, near Tulum.