China has launched yuan-denominated oil futures contract in Shanghai on Monday. On its opening day the futures contract opened at more than 6 per cent higher with almost 20 million barrels of the most-active September contract changing hands in the first 25 minutes as China debuted its oil benchmark.
This is the first time foreign investors will have access to Chinese commodity futures as the world`s top crude importer seeks greater influence over global prices.
The launch of Shanghai crude oil futures marked the culmination of a decade-long push by the Shanghai Futures Exchange (ShFE) aimed at giving the world’s largest energy consumer more power in pricing crude sold to Asia.
The current global standards are London-trade Brent futures, and West Texas Intermediate (WTI), which is traded in New York.
They mainly trade higher-quality light sweet crude oil, while the yuan contracts on the Shanghai International Energy Exchange involve mainly medium-sour crude.
It also is the latest in a series of steps by China to raise the world profile of the yuan.
The most-active September contract opened at 440.4 yuan per barrel from a reference point of 416 yuan, and jumped to as high as 447.1 yuan in the first few minutes.
At 9:24 a.m. (0224 GMT) prices were up 3.29 percent at 430 yuan, with 19,122 lots, equal to 19.1 million barrels of oil, traded.