China Oil Futures Contracts To Start Trading
in August
China's first fuel oil contracts will start trading in
August, said the Shanghai Futures Exchange. These will
be the first oil futures contracts allowed in China over
the past 10 years.
Five terminals, all in Guangdong, have been designated
as delivery points. They are Guangdong Nanhua Petroleum
Co., which is owned by China Petroleum & Chemical
Corp. (SNP); Guangdong (Panyu) Petrochemical Storage &
Transportation Ltd.; BP Guangdong Development Oil Products
Co., a joint venture between BP PLC (BP) and Guangzhou
Development Industry Holdings (600098.SH); Zhuhai Chimbusco
Petroleum Co.; and PetroChina Fuel Oil Co., a unit of
PetroChina Co. (PTR).
Two companies have been selected as inspection agencies.
They are China Certification & Inspection Group Guangdong
Co. and SGS-CSTC Standards Technical Services Co., the
exchange said.
The interest in China's oil futures market have been
given renewed interest because of the country's rapidly
growing demand for oil,
which has been pushing prices higher worldwide. A large
part of the increased demand is attributable to increased
private auto sales, which while recently slower, are
still growing at a rapid pace.
Since there have been no major oil finds recently, and
also because the main reserves are in politically unstable
parts of the world, the Chinese government has been focused
on securing new foreign
and domestic sources. In addition, policy has been focused
on securing fuel
shipping.
The Shanghai Futures Market was closed down in the early
90s because of irregularities. Many Chinese companies
and government agencies lost money because of speculative
investments which were compared to gambling. It has since
reopened, and efforts are underway to educate the public
about futures as an investment tool.
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