The Shanghai Futures Exchange plans to launch China's first crude-oil futures contracts this year, inviting foreign investors to participate in Beijing's latest attempt to burnish its global economic clout.
Wang Lihua, chairman of the exchange, told a forum yesterday that the bourse had completed drafting the legal and technical framework for oil futures. That brings it closer to starting trading of a benchmark contract during Asia-Pacific trading hours, a move regulators describe as a quintessential part of the global oil market.
It is the first time China's regulators have announced the timing of the trading debut of the long-heralded contracts, part of stepped-up efforts by Beijing to ensure the nation's energy security.
'The Shanghai Futures Exchange views oil futures as an important step that reflects China's efforts to open up and liberalise its futures market,' Wang (pictured) said.
Oil futures provide oil explorers, refiners and consumers with a hedging tool against the volatility of oil prices and could help the world's second-biggest economy gain a bigger say in pricing energy.
The contracts in Shanghai, based on medium-density crude, would be priced either in yuan or US dollars, Wang said. The Shanghai exchange would attract foreign investors, oil companies, consumers and traders to play the contracts.
Active trading of the contracts would put the bourse on par with the New York Mercantile Exchange and the International Petroleum Exchange, where global crude oil prices are set via the their benchmark contracts.