Industry personage: INE crude oil futures are more and more in line with the needs of domestic industry-Shanghai Metals Market

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Industry personage: INE crude oil futures are more and more in line with the needs of domestic industry

Translation 10:58:04AM Jun 24, 2019 Source:Wenhua Finance and Economics
The content below was translated by Tencent automatically for reference.

SMM News: June 22, by the Chinese Academy of Social Sciences Graduate School of International Energy Security Research Center and Social Sciences Literature Press jointly published the "World Energy Blue Book: world Energy Development report (2019)" (hereinafter referred to as the "Blue Book") was released in Beijing. The Blue Book points out that the resumption of crude oil futures trading in China is an inevitable requirement to promote economic and financial development and enhance the ability of China's global economic governance, and is of great significance to China's energy and financial security. INE crude oil futures are expected to become the benchmark for crude oil pricing in Asia. In fact, INE crude oil futures already have the basic conditions to become the oil pricing center of Asia and even the world. First of all, the production, consumption and trade of crude oil in China have had an important impact on the supply and demand pattern of crude oil market in Asia and even the whole world. China not only has a large oil output, but also the largest importer of crude oil in the world, and imports from a wide range of sources. Secondly, from the perspective of oil trading varieties, there is a lack of pricing benchmark based on intermediate sour crude oil in the world, and INE crude oil futures trading is based on intermediate sour crude oil. In addition, from the point of view of trading time, INE crude oil also has the corresponding time zone advantages. In the division of the world time zone, Shanghai is in the middle of London and New York. INE crude oil futures trading can make up for the gap between WTI crude oil futures and Brent crude oil futures in the time zone, forming a global 24-hour continuous trading pattern. In view of this, the Blue Book holds that INE crude oil futures can not only promote the integrity of the crude oil pricing system in the Middle East, but also fill the gap in crude oil pricing in the Asia-Pacific region, enhance the international voice of China's oil pricing, control the expenditure cost of China's imported crude oil, and avoid the impact of large fluctuations in international oil prices on China's economy to a certain extent. In the view of Yang an, head of energy and chemical research and development of Haitong Futures Investment Consulting Department, INE crude oil futures anchored oil prices in the international market at the initial stage of listing, and after gradually building a stable cross-regional price gap, it began to significantly reflect the supply and demand situation of China's crude oil market in the last six months. The data show that the trading volume of INE crude oil futures is gradually increasing during the day trading period, and accordingly, Chinese factors begin to influence the trend of international crude oil prices during the day trading period. Under its influence, the trading of international crude oil futures market in the Asian trading period increased significantly, especially Brent crude oil futures, the proportion of transactions in the Asian trading period increased by 50%. It can be said that INE crude oil futures has gradually begun to spread the supply and demand and industrial views of China's crude oil market to the international market, which makes the Chinese factor more and more concerned and valued by global crude oil investors. Before the listing of INE crude oil futures, the global crude oil trade market pricing is mainly based on Brent crude oil futures and WTI crude oil futures. Most users of crude oil industry, including China, basically refer to the above two kinds of crude oil futures for contract pricing. After more than a year of operation, the correlation between INE crude oil futures and international crude oil prices has been stable at more than 0.9. the market scale has also steadily ranked third in the world for similar products, and the participation of industrial enterprises has been increasing. The reason why INE crude oil futures have such performance, in addition to the international crude oil price trend is highly related, the more critical reason is that its price trend is more and more close to the reality of the domestic crude oil industry. The most typical example is that the price of China's refined oil, especially gasoline, is weaker than the international price this year. In this case, the price of INE crude oil is affected by it, and its performance continues to be weaker than that of international crude oil. This phenomenon has occurred many times this year. "after the comprehensive assessment, it is not difficult to find that INE crude oil futures are more in line with the risk management needs of China's crude oil industry." Yang an believes that with the development and maturity of INE crude oil futures, it is bound to attract more and more domestic and foreign crude oil production enterprises, refineries and other processing enterprises, oil traders and end users to participate in it, thus promoting it to become the pricing benchmark of the crude oil market in China and even in the Asia-Pacific region.

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Industry personage: INE crude oil futures are more and more in line with the needs of domestic industry

Translation 10:58:04AM Jun 24, 2019 Source:Wenhua Finance and Economics
The content below was translated by Tencent automatically for reference.

SMM News: June 22, by the Chinese Academy of Social Sciences Graduate School of International Energy Security Research Center and Social Sciences Literature Press jointly published the "World Energy Blue Book: world Energy Development report (2019)" (hereinafter referred to as the "Blue Book") was released in Beijing. The Blue Book points out that the resumption of crude oil futures trading in China is an inevitable requirement to promote economic and financial development and enhance the ability of China's global economic governance, and is of great significance to China's energy and financial security. INE crude oil futures are expected to become the benchmark for crude oil pricing in Asia. In fact, INE crude oil futures already have the basic conditions to become the oil pricing center of Asia and even the world. First of all, the production, consumption and trade of crude oil in China have had an important impact on the supply and demand pattern of crude oil market in Asia and even the whole world. China not only has a large oil output, but also the largest importer of crude oil in the world, and imports from a wide range of sources. Secondly, from the perspective of oil trading varieties, there is a lack of pricing benchmark based on intermediate sour crude oil in the world, and INE crude oil futures trading is based on intermediate sour crude oil. In addition, from the point of view of trading time, INE crude oil also has the corresponding time zone advantages. In the division of the world time zone, Shanghai is in the middle of London and New York. INE crude oil futures trading can make up for the gap between WTI crude oil futures and Brent crude oil futures in the time zone, forming a global 24-hour continuous trading pattern. In view of this, the Blue Book holds that INE crude oil futures can not only promote the integrity of the crude oil pricing system in the Middle East, but also fill the gap in crude oil pricing in the Asia-Pacific region, enhance the international voice of China's oil pricing, control the expenditure cost of China's imported crude oil, and avoid the impact of large fluctuations in international oil prices on China's economy to a certain extent. In the view of Yang an, head of energy and chemical research and development of Haitong Futures Investment Consulting Department, INE crude oil futures anchored oil prices in the international market at the initial stage of listing, and after gradually building a stable cross-regional price gap, it began to significantly reflect the supply and demand situation of China's crude oil market in the last six months. The data show that the trading volume of INE crude oil futures is gradually increasing during the day trading period, and accordingly, Chinese factors begin to influence the trend of international crude oil prices during the day trading period. Under its influence, the trading of international crude oil futures market in the Asian trading period increased significantly, especially Brent crude oil futures, the proportion of transactions in the Asian trading period increased by 50%. It can be said that INE crude oil futures has gradually begun to spread the supply and demand and industrial views of China's crude oil market to the international market, which makes the Chinese factor more and more concerned and valued by global crude oil investors. Before the listing of INE crude oil futures, the global crude oil trade market pricing is mainly based on Brent crude oil futures and WTI crude oil futures. Most users of crude oil industry, including China, basically refer to the above two kinds of crude oil futures for contract pricing. After more than a year of operation, the correlation between INE crude oil futures and international crude oil prices has been stable at more than 0.9. the market scale has also steadily ranked third in the world for similar products, and the participation of industrial enterprises has been increasing. The reason why INE crude oil futures have such performance, in addition to the international crude oil price trend is highly related, the more critical reason is that its price trend is more and more close to the reality of the domestic crude oil industry. The most typical example is that the price of China's refined oil, especially gasoline, is weaker than the international price this year. In this case, the price of INE crude oil is affected by it, and its performance continues to be weaker than that of international crude oil. This phenomenon has occurred many times this year. "after the comprehensive assessment, it is not difficult to find that INE crude oil futures are more in line with the risk management needs of China's crude oil industry." Yang an believes that with the development and maturity of INE crude oil futures, it is bound to attract more and more domestic and foreign crude oil production enterprises, refineries and other processing enterprises, oil traders and end users to participate in it, thus promoting it to become the pricing benchmark of the crude oil market in China and even in the Asia-Pacific region.

Click to view