Shanghai, 26 March - Neftegaz.RU. China has launched its 1st ever oil futures contracts denominated in the local currency, in a crucial step by the world’s biggest oil importer to wield greater pricing power and challenge industry benchmarks in Europe and the US.
China surpassed the US in 2017 as the world’s biggest oil importer, giving the Chinese government additional impetus to wrest pricing control from offshore markets, as well as to promote the international use of the yuan in global commerce.
The regulator «has the confidence, resolution and capability to build a sound crude oil futures market,» Liu Shiyu, chairman of the China Securities Regulatory Commission said at the Shanghai Futures Exchange before trading got under way. “It will play an important role [in China’s economy].»
Huang Lei, an independent commodity futures market analyst, said it was «a 1st step for China to gain pricing power.» He added: «The exchange and regulator will make further efforts to attract foreign investors.»
China’s ultimate goal is to create a crude oil benchmark in Shanghai that can help Beijing wrest some pricing power away from international competitors such as Intercontinental Exchange’s Brent contract and the New York Mercantile Exchange’s WTI.
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