People's Daily: Shanghai Crude Oil Futures Trading Volume Hit New Highs

On June 22, Wang Fenghai, general manager of the Shanghai Futures Exchange, introduced that since this year, as the demand for physical hedging has increased, the scale of the Shanghai crude oil futures market has grown by leaps and bounds, and trading volume and positions have reached new highs, with the largest single-day trading volume of nearly 500，000 hands, and the highest open position exceeds 180,000 hands.

On that day, the Shanghai Futures Exchange, Shanghai International Energy Exchange Center, and China Petroleum and Chemical Industry Federation jointly hosted the "2020 Yanyan Energy Forum." Wang Fenghai introduced at the forum that the average daily trading volume of Shanghai crude oil futures reached 300,000 lots in June, and the average daily holding volume exceeded 150,000 lots, which were increased by 3 times and 4 times respectively from the beginning of the year; the daily trading volume increased from 25% to 50%, the liquidity of Asian trading hours on some trading days has exceeded that of Brent crude oil futures, and the influence of Shanghai crude oil futures during Asian hours has gradually emerged.

According to the data of the Shanghai Futures Exchange, from January to May this year, the average daily volatility of Shanghai crude oil futures main contract was around 3.7%, which was far lower than the volatility level of other mainstream international markets. As of the end of May, the number of Shanghai crude oil futures general account openings increased by 36% compared with last year, and the average daily holding ratio rose to about 50%. Among them, the average daily holdings of hedging accounted for 38.5%, which was three times that of the same period last year. From January to June, Shanghai crude oil futures delivered a total of nearly 27 million barrels, accounting for about 57% of the total delivery since listing, an increase of about 1.5 times compared with the same period last year, involving multiple oils from Oman, Basra, Upper Zakum and Qatar offshore crude oil, which aim to help the refinery adjust the remaining oil shortages and achieve effective connection with the spot market. Well-known domestic and foreign oil-related companies actively participate in the delivery, and the amount of hedging delivery accounts for more than 40%, and the futures market has significantly improved its ability to serve the real economy. At the same time, the internationalization of Shanghai crude oil futures has continued to increase. Since this year, the average daily trading volume of foreign investors in crude oil futures has accounted for about 16%, and the average daily holdings have accounted for about 28%.

Wang Fenghai pointed out that the Shanghai Stock Exchange will continue to optimize the rule system, improve the trading mechanism, and promote the domestic and foreign crude oil spot trade to use China's crude oil futures price as the benchmark price. It will coordinate the planning, orderly promote the listing of natural gas, gasoline and diesel varieties, accelerate the promotion of crude oil futures options, crude oil futures ETF and other listings, continuously improve the energy product sequence, and enrich risk management tools. In addition, it will further accelerate the pace of internationalization of the futures market, vigorously promote the listing of international copper futures, shipping index futures and other varieties, and explore the path for the opening of various futures markets such as qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII). It will deepen cooperation and exchanges with international institutions, attract more domestic and foreign traders to participate in the energy futures market, therefore enhance the influence of China's energy futures prices. (People's Daily, Qiu Haifeng)