FXStreet (Mumbai) – As reported by Reuters, China may launch a global crude oil futures contract as early as October to compete with the existing London Brent and the US WTI benchmarks, as it pushes ahead with reforms to open up its oil markets.
Markets believe the long-awaited crude contract would better reflect China’s growing importance in setting crude prices, as well as boost the use of the yuan in which it will be traded, although volatile global trading conditions and China’s recent intervention in stock markets have raised some concerns.
The Shanghai International Energy Exchange, also known as INE, circulated a draft of the futures contract to market participants last month, saying the launch could happen as early as October.
INE explained in a statement issued to Reuters in response to questions about the new contract, “The development of a futures market is closely linked to the physical market. The liberalisation of the Chinese oil market will provide more favourable market conditions for the launch of crude oil futures.”
(Market News Provided by FXstreet)