Part A: Review (2019/1/14-2019/1/18)

From January 14, 2019 to January 18, 2019:the closing price of the main contract of crude oil futures of INE on Friday was 432 yuan/barrel, 5.1 yuan higher than the closing price of the last trading day of last week. The highest price for this week is 433.3 yuan/barrel, and the lowest point is 412.5 yuan/barrel.

This week (2019/1/14-2019/1/18), the total volume of the main contract was 2,646,802 lots, a decrease of 360,360 lots from last week. After the close of trading this Friday, the open interest of the main contract was 48,930 lots, a decrease of 42 lots from the last trading day of last week.

Notes: The main contract refers to the futures contract with the maximum open interest.

Part B: Market Dynamics

1. Circular on the Price Limit Update for SC1902

The price limit for SC1902 will be updated from ±8% to ±10% since January 23, 2019. Shanghai International Energy Exchange

January 16, 2019

2. Mideast VLCC rates halt slide

Mideast Gulf VLCC freight rates halted their recent slide on Monday, as owners anticipated the next tranche of cargoes and sentiment appeared to shift.

Unipec booked the Seaways McKinley for a voyage to China from the Mideast Gulf or Mina Al Fahal at WS56 or WS57 respectively with 26-28 January loading, plus an owner option to substitute for the Navarin. The rate was at the top end of the range for modern eastbound shipments, and might also have included a premium for the various attached options. Formosa was in the market for a 26-28 January shipment to Taiwan and reportedly received as many as eight offers. But charterers had already almost covered all of their January requirements, with likely only a handful of cargoes remaining.

Despite the weak demand, the Mideast Gulf-east Asia VLCC rate edged up by WS1 to WS55, the assessment's first day-on-day increase so far this year. VLCC rates have been under pressure in recent weeks as charterers worked January-loading dates, while loadings this month are down from late-2018 levels because of the Opec production cut agreement, resulting in lower demand for tankers. But the first wave of February-loading Mideast Gulf cargoes are expected soon, so shipowners were increasingly resistant and bullish on Monday ahead of some renewed demand. That sentiment halted the decline in VLCC assessments but whether rates are poised to rebound again will depend on the number of spot cargoes which emerge for early February.

Part C: Transaction Summary

Since 2018/3/26 and up to 2019/1/18 closing, Shanghai crude oil futures’ cumulative trading volumes is 60.20 million lots, and the cumulative trading volumes of the first month of listing (2018/3/26-2018/4/25) is 1.33 million lots. The cumulative amount of transaction is 28.43 trillion yuan (2018/3/26-2019/1/18), which is 50.13 times that of the cumulative amount of the first month of listing.

Average daily turnover of the main contract is 529,360 lots (2019/1/14-2019/1/18), and average daily turnover of the main contract is 601,432 lots (2019/1/2-2019/1/11). Open interest of all the contracts of crude oil futures of INE also rised steadily, with 3,558 lots on 2018/3/26 and 74,240 lots after the closing of 2019/1/18.

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