The preparations for the launch of crude oil futures in China have also completed a big step. Recently, the central bank issued an announcement that stipulates that domestic crude oil futures trades will be denominated and settled in renminbi from August 1. Offshore traders and offshore brokerage institutions may use foreign exchange directly as margin, and foreign exchange deposits can be used for settlement of domestic crude oil futures funds. Experts analyzed that the current international commodity market has reached the critical period of restructuring rules. Crude oil futures use renminbi to calculate prices, which is conducive to improving the power of the Chinese energy market.
International oil market is about to usher in "China price"
For a long time, because of the inability to price in the crude oil market, China had to refer to the pricing of the US crude oil futures market and use the US dollar for the settlement of the oil trade. Since December last year, the China Securities Regulatory Commission approved the Shanghai Futures Exchange to launch crude oil futures trading at its International Energy Trading Center. The market has expressed general expectations for crude oil futures to be listed within this year. The announcement issued by the central bank in the eyes of people in the industry shows that on the one hand, China's crude oil futures are not far away and supporting measures are gradually improving. On the other hand, the reason for deeper promotion of China’s crude oil futures is to “lock in†the eyes. Competing for pricing rights, adding "China prices" to the international price system.
Currently in the international crude oil market, there are two main benchmarks, the New York Futures Exchange oil price and London Brent oil prices, both oil prices are "dollar/barrel" pricing; this is a common use in the Chinese mainland market, "yuan / l The valuation of "yuan/ton" varies greatly. Hu Yuyue, director of the Securities and Futures Research Institute of the Beijing Technology and Business University, said in an interview with this reporter that this time the central bank launched this policy, from a more macro and strategic point of view, the significance is extraordinary. He said: "Now it happens that when a global commodity needs to be re-priced, gold, crude oil, iron ore and other commodities are facing important opportunities for repricing."
The same barrel of oil imported from China has a high price
The data shows that the current China has become the most important buyer in the global oil market. In 2014, China imported 310 million tons of crude oil, an increase of 9.5% year-on-year. In April and June of the first half of this year alone, China’s monthly crude oil imports exceeded the United States twice and became the largest crude oil importer of the month. However, we are followers in crude oil prices. With a barrel of oil, the cost of China's imports is higher than that of foreign countries. This lack of bargaining power has made it possible for Chinese oil companies to passively accept international oil prices even when the domestic supply and demand situation deviates from the international situation, resulting in greater losses.
According to Li Runsheng, vice president of the China Petroleum and Chemical Industry Federation, this is mainly due to the lack of internationally influential oil futures markets and price benchmarks in Asia, resulting in the lack of discourse power in oil pricing.
“Before, in the 'Golden Decade' when commodity prices rose sharply, we were unable to change the rules and under great pressure. However, after the financial crisis, almost all commodities, including crude oil, were all 'slumbed'. It can be said that at present, international commodities have entered the buyer's market, which can be confirmed from the recent dip in the price of gold and the bottoming of oil prices.Therefore, this is precisely a reconstitution of international trade rules, reconstruction of the pricing system, and even reconstruction. An important period of opportunity for the global financial system,†said Hu Yuyue.
Dong Xiucheng, director of China Petroleum University’s China Petroleum and Gas Industry Development Research Center, analyzed in an interview with this reporter that as an important oil consumer in the world, we are currently launching “Chinese oil†and we are trying to form us through this kind of futures market. Influence in the commodity market. “Of course, this goal and hope is good, but it can't be realized. We must continue to judge from the feedback of the next international market.†Dong Xiucheng said.
Accelerating the process of RMB internationalization
In addition, the launch of “China Oil†also complements the strategy of RMB internationalization. Hu Yuyue analyzed that today’s China and the past cannot be compared with each other. The renminbi is already the world’s fifth-largest settlement currency, and being included in the SDR currency basket is also a predictable future. It is of great significance to use RMB as a valuation and settlement currency to establish our influence in the international commodity market.
“The international monetary system should also be multi-polarized. China now has the ability and strength to take a seat in the multi-polar international currency system. Of course, this cannot rely on the futures market alone and it requires a multi-layered commodity market system and derivatives market. The system, including the financial market system, etc., has come together to develop and jointly promote the improvement of our right to speak.†Hu Yuyue believes that, of course, it cannot ignore the risks involved. For example, crude oil futures denominated in RMB may have existed at the beginning. In the case of a transaction, the transaction may not be very active.
"The reason for the lack of activity is that the domestic crude oil market is not yet completely market-oriented; the second is that renminbi pricing and settlement has just started to be recognized by many countries in the world. But we have taken this step and formed for us. China’s dominant trade rules and the introduction of funds into the open market are all very necessary,†said Hu Yuyue.
Dong Xiucheng believes that because our oil market itself is not well-developed in terms of marketization, the purpose of promoting “China Oil†at this time is also to attract external investment forces to participate. "One step is difficult, but more and more market players, our influence is also greater, in addition to the ability to attract capital to enter into the capital to prove that our economic situation is worth investing." Dong Xiucheng said.
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