Today on the Shanghai international energy exchange (INE) is a subsidiary of Shanghai futures exchange (SHFE) was officially launched trading oil futures denominated in yuan. China went to this a long 17 years.
The head of the state Committee for control over the securities of China Liu Shiyu in his speech at the opening ceremony of bidding, said: “the Committee is committed and has the capacity to properly build and organize the work of the oil futures market with Chinese characteristics”.
The contract volume is 1 thousand barrels minimum price fluctuation is 0.1 yuan per barrel, reports TASS. Trading sessions divided throughout the day and will be held with the following interval: 09:00-10:15, 10:30-11:30 and 13:30-15:00 local time. (04:00-05:15, 05:30-06:30, and 08:30-10:00 GMT).
Bidding on the first working day of the new tool opened with a price of 440 yuan (about $69,8) per barrel of oil. Participation in them took more than 400 Chinese and foreign customers. They include companies such as Unipec Asia Company Limited, Glencore Singapore Pte Ltd, North Petroleum International Company Limited and many others. In the first hours concluded more than 200 transactions.
Deliveries will be made from the ports of Oman, Qatar, Yemen, Iraq (Basra) and Eastern China. Ports of loading can be further adjusted to reflect market conditions. Supply of oil will remain in the seven storage facilities located in the coastal regions of the Chinese provinces of Zhejiang, Shandong, Guangdong, Liaoning, and also in the deep-sea port of Shanghai.
Market analysts believe that this event becomes an important signal to the world markets as Chinese oil futures, according to the Chinese, must compete with futures on Brent crude oil — one of the benchmark brands of “black gold”.
The most optimistic experts say that with time the Chinese currency will be able to oust the dollar thanks to such contracts and the total power of the PRC economy. Skeptics argue that it will not happen until the government of China controls the yuan. So even if international traders agree on the bidding and the calculations in yuan, considered the world price of oil they will continue in dollars.
However, it must be admitted that China has become increasingly participate in commodity pricing. It is understandable — the Chinese economy has become one of the largest consumers of energy. Therefore, China’s decision to launch a new trading instrument on the exchange is not surprising.
China is a very long prepared for this step. So, the government has made that allowed independent refineries be able to import oil, and the companies are actually ordered to provide the momentum in the domestic market, where it will negotiate new oil contract in the national currency of the PRC.
Further, China actually created the first commodities platform, which will be available for foreigners. All this can be regarded as quite deliberate step in a long-term strategy to gradually increase the openness of the approves countries.
Of course, futures for mix Brent: not going anywhere, but it is likely that the changes that will occur in the global steel sector will have an impact on “dollarsurveys” the oil market, and eventually, perhaps, not only on him but on the entire global financial system.
The yuan, despite some weakening in recent times, has long been gaining “economic weight”, gradually turning into one of the most frequently used in the world trade currencies. If payments for oil will also be in Renminbi, this may be a serious competitor to the US dollar.