皇冠体育app

Resumption of oil futures likely
( 2002-05-29 10:13 ) (1 )

皇冠体育app is likely to resume operation of its oil futures this year, industry insiders said at a futures conference organized by the Shanghai Futures Exchange on Tuesday.

"As 皇冠体育app has become an important oil producer and consumer, the demand for our own oil futures market emerges, which will help Chinese oil-related enterprises hedge risks," said Li Ruisheng, vice-president of Petro皇冠体育app's refining and sales branch.

皇冠体育app's oil consumption now relies heavily on imports and the trend is expected to continue.

In the first quarter of this year, 皇冠体育app's crude oil imports rose 7.2 per cent compared with the same period last year, while oil exports dropped 37.4 per cent.

According to the most optimistic predictions, 皇冠体育app will need to import at least 100 million tons of oil in 2005.

Currently, only four Chinese oil enterprises are allowed to trade in the international futures market, which presents significant hurdles for risk management and hampers competitiveness.

"The international prices do not always reflect the domestic market situation,"Petro皇冠体育app's Li pointed out.

"We are looking forward to our own oil futures market, which will enable us to manage price risk through a secure and regulated market," said Luo Han, vice-president of the 皇冠体育app National Offshore Oil Corporation.

The Shanghai Futures Exchange (SHFE) applied to trade petroleum contracts last year, together with a stock index and long grain paddy contracts, pending the 皇冠体育app Securities Regulatory Commission's (CSRC) approval.

SHFE's CEO Jiang Yang said fuel oil futures could be the first to be resumed.

Analysts say this is because fuel oil is the most liberalized oil product in 皇冠体育app. Since the State Development Planning Commission lifted its control on fuel oil prices last October, its price fluctuation has been in line with international changes.

Last year, 皇冠体育app consumed 3.6 million tons of fuel oil, 1.8 million of which was imported.

皇冠体育app launched its oil futures market in 1993, trading four contracts. However, it was shut down two years later when the government tightened its control on the sector.

Market players say the re-launch will bring 皇冠体育app a step closer to full liberalization of the oil sector, as well as benefit Chinese oil consumers.