What impact will China's crude oil futures market bring to the industry?


Recently, the listing of China's crude oil futures has become a hot spot that investors are looking forward to. So, when will China's crude oil futures be listed? What will be the impact on the industry once China's crude oil futures are listed?

In this regard, the energy trading center said: previously, it has issued a draft for soliciting opinions from the outside world, and now it has received many opinions. The trading center is actively and steadily promoting the preparations for crude oil futures. Once the listing time of crude oil futures is determined, it will be announced to the public in a timely manner.

On December 12, 2014, China Securities Regulatory Commission officially approved Shanghai Futures Exchange to carry out crude oil futures trading in its international energy trading center, which means that the listing of crude oil futures has entered a substantial stage. In the next step, China Securities Regulatory Commission will, together with relevant ministries and commissions, issue supporting policies and management measures for the listing of crude oil futures. The CSRC requires Shanghai international energy trading center to make preparations for listing crude oil futures to ensure the smooth operation of crude oil futures. The SFC will choose the opportunity to approve the listing of crude oil futures contracts. For oil companies, the listing of China's crude oil futures has both opportunities and challenges, which will provide an effective platform to avoid market risks and open up new business models. However, it will also have an impact on the current business model.

Specifically, the listing of China's crude oil futures will bring the following impacts to the industry.

It is conducive to the establishment of a reasonable new world oil trade order and the strengthening of Asia's voice in the international oil market. Although the role, status and influence of the international futures market are expanding, there is no crude oil futures contract in Asia that can accurately reflect the supply and demand of the local market and has a strong influence on crude oil pricing. This is not in line with Asia's position as the world's first in oil consumption, energy refining, trade and transportation. The development of China's own crude oil futures will help to break the current unreasonable oil trade system and establish a more effective and reasonable new oil trade order.

It is conducive to accelerating the establishment of a modern oil market trading system in line with China's national conditions. An efficient modern oil market trading system should include two legs: spot market and futures market. They have different functions. They complement each other and are indispensable.

It is conducive to the effective allocation of resources and the long-term healthy development of the industry. Futures trading is an important supplement to commodity spot trading under the condition of marketization. Through the discovery of this important function of futures trading price, the contradiction between supply and demand of oil market can be adjusted prospectively, resources and market can be effectively balanced, and benefit distribution can be reasonably adjusted, so as to promote the long-term healthy development of the entire industrial chain.

It is conducive to promote and improve the marketization process of China's energy circulation system and price formation mechanism. The listing of China's crude oil futures will improve China's oil market system, make the spot market and futures market interrelated and operate effectively, give full play to the price discovery function of the futures market, force the reform of domestic price mechanism and circulation system, and provide a powerful auxiliary tool for the reform of China's oil circulation system and price mechanism.

It is helpful for enterprises to improve their ability to resist the risk of price fluctuation and market competitiveness. Through the price discovery and hedging function of the futures market, we can avoid the risk of price fluctuation, but at the same time, we should also pay attention to prevent the high risk caused by futures trading. We need to formulate a strict risk control system and strengthen the prevention of transaction risk.

Of course, the launch of China's crude oil futures will also bring some opportunities and challenges to oil companies.

Firstly, it provides a means and platform to avoid the risk of market price fluctuation. At present, the main purpose of domestic oil companies participating in overseas futures trading is to hedge risks with spot trade. However, there are risks such as different trading varieties and price trends at home and abroad, which makes the hedging effect difficult to guarantee. The introduction of domestic crude oil futures can provide liquidity and futures prices based on domestic oil supply and demand, which undoubtedly provides more appropriate risk aversion tools and means for domestic oil companies. Through the hedging function of futures market to avoid the risk of market price fluctuations, we can lock in the cost and profit of enterprises and reduce the cost of purchasing or selling.

hisSecond, to provide an authoritative market price signal to better guide the production and operation of oil companies.China's oil futures prices better reflect the domestic oil supply and demand situation. With the change of domestic supply and demand, oil companies can use the price signal of domestic futures market to insight into the market changes, optimize the production and operation of enterprises, and make the production and operation more stable and controlled.

Thirdly, China's crude oil futures trading will have an impact on the current business model of CNPC. The listing of crude oil futures indicates that the process of oil financialization will be accelerated, the influence of futures market on the spot market will be increased, the strength of oil industry chain related enterprises to participate in futures hedging will be strengthened, and the business innovation modes such as the combination of futures and cash and virtual inventory will increase, which will be beneficial to the operation mode of Chinese oil companies focusing on production and processing It's a great challenge.

Finally, the launch of China's crude oil futures will intensify the competition in the domestic market. At the same time of establishing China's crude oil futures market, it is necessary to reform the petroleum industry system, open up the market, attract domestic and foreign market participants to trade, and form a multi subject competition situation. This will have a direct impact on the existing domestic market pattern. In the future, the domestic market supply and demand situation is relatively loose, the market competition will become more intense.

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