China’s Crude Oil Futures Contracts Has Potential To Become The Benchmark
$OIL
An international expert said Tuesday that China’s upcoming Crude Oil futures contract has the potential to become a global benchmark in the trade.
Dave Ernsberger, global Oil director at Platts, a provider of energy and commodity information, was speaking at a media Roundtable organized by Dubai-based research company Gulf Intelligence.
He said Chinese demand for Crude Oil from the Gulf Arab countries reached all-time highs this year.
“This gives reason for the world’s second economy to launch its own home-made derivatives on the ‘Black Gold,’” he pointed out.
In August, the Shanghai International Energy Exchange (INE) circulated a draft of the futures contract to market participants, saying the launch could happen as early as October, he said.
Crude Oil futures contracts are used by energy traders and energy consuming firms, like airliners, to hedge themselves against anticipated price fluctuations.
“China is destined to eventually become the largest oil consumer in the future,” said Mr. Ernsberger, who worked as an analyst from 2004 to 2009 in China and Singapore, among other Asian nations.
China’s consumption of Crude Oil will exceed that of the United States by Y 2034, according to the Unites States Information Administration.
In June, 90.05% of Oman Crude went to China.
In April this year, China’s Crude Oil imports reached a record of 7.40-M BPD, he said, adding that the imports are expected to continue the upward path although the global economy faces challenges of lower growth in the EM’s (emerging markets) and Europe.
Monday, China’s National Bureau of Statistics posted a 6.9% growth Y-Y in Q-3 of Y 2015, slightly lower than the 7% seen in 1-H of the year.
By Song Miou
Paul Ebeling, Editor
HeffX-LTN
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