China Focus: China launches crude oil futures trading

China starts trading oil futures, but benchmark status some way off

But that "comes as Shanghai crude oil futures made a strong debut and was well received by investors", Kapadia said in emailed commentary.

China has launched yuan-dominated crude oil futures, a major step in Beijing's years-long push to win greater sway over oil pricing.

Shanghai crude oil futures opened up more than 6 percent with nearly 20 million barrels of the most-active September contract changing hands in the first 25 minutes as China debuted its oil benchmark.

Crude was also squeezed ed by a rise in the number of US rigs drilling for oil to a three-year high of 804, implying further rises in production, which has already jumped by a quarter since mid-2016 to 10.4 million barrels per day (bpd).

Specific issues for traders include Shanghai's shorter trading hours, split into three slots, with the afternoon session ending at 3:00 p.m. local time (0700 GMT), just before London ramps up.

The early involvement of big global players was a morale boost to the fledging market, but state oil majors like PetroChina and Sinopec are expected to provide a significant amount of liquidity in the long term.

China's launch of yuan-backed oil futures has sparked huge interest among investors with initial trade volumes of the contracts outpacing overnight transactions of rival Brent crude - a globally recognized benchmark.

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Families of the Sandy Hook victims sued Remington , claiming the manufacturer bore some responsibility for the attack. Still, Remington was left damaged when some investors distanced themselves from the company.

US trade policy against China last week rattled the broader markets.

The global benchmark dipped 0.57 per cent, or 40 cents, to $69.71 per barrel, while West Texas Intermediate, the U.S. benchmark, fell below the $65 level to $64.60 per barrel, down one per cent.

Financial oil markets have always been dominated by Europe's Brent and America's WTI, despite Asia being the world's biggest and fastest growing oil consumer, has so far not had a benchmark.

Despite this, there were concerns over regulatory interference, as seen in other Chinese commodities like iron ore and coal.

What was a surprise to many was that Glencore - not a Chinese state oil major - executed Shanghai's first crude deal. Analysts also expected gasoline inventories to have fallen by 2 million barrels and distillate stocks to have declined by 1.9 million barrels.

Brent has risen by more than 5 percent this month while WTI is up over 4 percent.

Yang Xiaoping, president of BP China, said China's crude oil futures offer companies in the real economy a hedging tool that can better reflect market conditions in Asia. Yuan-based futures will help promote the yuan as a global currency. Some 18,540 lots have reportedly been sold and purchased so far.

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