China’s crude oil futures contracts have so far been widely considered a success, yet the market still has a long way to go to catch up with mature international crude benchmarks, analysts said.
The trading volume and open enthusiasm of the crude oil futures contract at the Shanghai International Energy Exchange has been steadily expanding.
The Chinese futures market uncovered the yuan-denominated crude oil futures contract on March 26, the first of its kind that is available overseas investors, setting a crude oil pricing benchmark that insiders trust better reflects supply and demand in China and Asia.
Retail speculators, including people and here and now informal investors, contributed altogether to the ongoing sharp lift in market liquidity, accordingly participants typically plan to exploit sharp price fluctuations to take speedy benefits.
China is taking the lead thanks to innovative measures, as the launch of crude oil futures is making up for the lack of a crude oil benchmark in Asia, giving companies in the real economy a bargaining tool when importing crude.
The market is anticipating the further opening-up of China’s oil market, including the more prominent association of privately owned businesses, to push forward and contribute liquidity in the new derivative market. The more players permitted in the market, the more prominent the lift to trading interest.
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