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New Chinese oil contract will challenge the dollar's dominance as the primary currency for trading commodities
To be traded on the Shanghai International Energy Exchange to compete with the existing global benchmarks, traders are already talking about the new benchmark potentially superseding these more established crude futures contracts.
The launch of the Chinese contract is also a reflection of Beijing’s growing influence over world energy and commodities markets. China has now grown to be the world’s second largest consumer of oil after the US and is quickly closing the gap as more of its gigantic population aspire to the trappings of a middle-class lifestyle such as a family car. Oil companies such as Royal Dutch Shell have plans to open hundreds of new filling stations in China to meet expected demand from the country’s burgeoning transport sector.
Developing a futures contract is the logical next step for China now that it has developed into a major power in the physical market for crude oil. Competition among the world’s largest producers in the Organisation of the Petroleum Exporting Countries (Opec) such as Saudi Arabia and Iraq are competing fiercely to win a greater share of a market they see being the future of the industry …. http://www.telegraph.co.uk
Source: http://luismmx.blogspot.com/2015/09/new-chinese-oil-contract-will-challenge.html
