China set to take on US and UK crude oil features

Workers transport barrels of crude oil during the oil spill cleanup operation near Xingang Harbor in Dalian, northeast China's Liaoning Province, July 25, 2010. [File Photo: Xinhua/Yao Jianfeng]

The first ever crude-features contract for China has been launched. This comes amid challenge benchmarks in Europe and the US.

A report by Bloomberg said that the yuan-denominated futures traded at $68.47 per barrel for September settlement by 11:30 a.m. local time Monday.

The Chinese contract was trading around $4 a barrel higher than West Texas Intermediate. It’s believed that the Chinese contract will challenge WTI, and UK Brent.

In 2017, China was the world’s biggest buyer of foreign oil, surpassing the U.S. in annual gross crude oil imports, the country imported 8.4 million barrels per day. Last year, China also imported 22 per cent more crude from Africa, 13 per cent more from South America and 14 per cent more from Russia.

"Prices assessed at the Shanghai exchange will reflect China's crude supply and demand," said Sushant Gupta, research director at energy consultancy Wood Mackenzie. He added that its independence from movements in the UK's Brent and WTI "could provide new arbitrage opportunities for traders".