中国原油期货开门红 | China’s crude oil futures turnover hits 18.3bln yuan

China’s yuan-denominated crude oil futures turnover hit 18.3 billion yuan on Monday after its launch at the Shanghai International Energy Exchange, which is the first of its kind listed on the Chinese mainland to overseas investors.

On the first trading day, a total of 42,300 transactions of the 15 listed crude oil contracts changed hands, with the price of SC1809 contracts starting at 440 yuan per barrel and closing at 429.9 yuan per barrel, 3.34 percent higher than the benchmark price.

The listed futures for trading are contracts to be delivered from September this year to March 2019. The benchmark prices of the 15 contracts were set at 416 yuan, 388 yuan and 375 yuan per barrel, depending on delivery dates.

Trading margins for the futures were set for 7 percent of the contract value. The upward and downward trading limits were set at 5 percent, with the trading limits on the first trading day set at 10 percent of the benchmark prices.

Chairman of the China Securities Regulatory Commission (CSRC) Liu Shiyu and Secretary of the Shanghai Municipal Committee of the Communist Party of China (CPC) Li Qiang attended the launching ceremony.

The official launch of the crude-futures contract marks a new step in building Shanghai into an international financial center, said Liu.

“We have the confidence, determination and ability to build a crude oil futures market with Chinese characteristics, and make due contributions to better protect the legitimate rights and interests of investors, and better serve the high-quality development of the real economy,” said Liu.

The introduction of the crude oil futures contract represents a milestone for China's futures market, since China has overtaken the US as the world's largest importer of crude oil last year.

Crude oil sold in Asia is mainly priced against the Dubai, Oman and dated Brent benchmarks or Oman crude futures on the Dubai Mercantile Exchange.

"The Asia-Pacific region has surpassed America and Europe in crude consumption, but a benchmark with high recognition is still missing. With growing import, China has long been able to join the competition," said Wu Libo, a professor at Shanghai-based Fudan University.

The launch of the oil futures would also greatly improve the risk management capability of small and medium-sized firms, according to Gu Jiantao, an analyst with Chinese investment bank BOCI. 

Gu said he expected sufficient demand for the contract from both industrial and financial clients as they needed a tool to manage risk and hedge against inflation.