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The Shanghai Futures Exchange will continue to promote the construction of a multi-level derivatives market system and accelerate high-level opening up

Fang submitted 2020-09-17 19:27:51

On September 14, 2020, the 36th Asia-Pacific Petroleum Summit was held online by S&P Global. Wang Fenghai, general manager of the Shanghai Futures Exchange (hereinafter referred to as the Shanghai Futures Exchange), had a dialogue with Martin Fraenkel, President of S&P Global Platts through online interviews, and introduced to the world energy industry that China’s crude oil futures have been in operation for more than two years, and conduct an in-depth discussion on China’s contribution in the current oil market environment.

Wang Fenghai said that in the past two years since listing, the overall trading volume and open interest of Shanghai crude oil futures have steadily increased. From the beginning of the year to the first half of this year, the average daily trading volume of Shanghai crude oil futures was about 180,000 lots and the average daily open interest was about 120,000 lots, an increase of 3% and 286% respectively year-on-year. In addition, about 27 million barrels were delivered in the first half of the year, a year-on-year increase of 150%. From the perspective of the global crude oil futures contract market size, if the unit of futures trading volume is converted to barrels, the trading volume of Shanghai crude oil futures is second only to Brent and WTI crude oil futures, becoming the third largest crude oil futures market.

In terms of internationalization, as of August 30, Shanghai crude oil futures attracted customers from more than 20 countries and regions in five continents, Asia, Africa, Europe, North America, and Oceania, including the United Kingdom, Switzerland, Singapore, the UAE, and Australia. Japan, Thailand and other countries. In the first half of the year, the average daily trading volume and the percentage of open interest held by overseas participants increased by 1.9% and 6.5% respectively. Recently, the Shanghai Futures Exchange and the Shanghai International Energy Exchange have been included in the European Securities and Markets Administration (ESMA) post-trade transparency assessment positive list of third-country trading venues, reducing market transactions and operating costs of EU investors’ compliance with China’s crude oil futures

This year, due to the global impact of the pandemic and OPEC production, demand for crude oil has fallen off a cliff, and international oil prices have fallen to historical lows. Wang Fenghai said that when supply and demand in domestic and foreign markets diverged, Shanghai crude oil futures moved out of a relatively independent market, and more efficiently and directly reflected the supply and demand situation in the Asian market. At present, many well-known oil companies at home and abroad have actively participated in the delivery. In order to meet the delivery demand of the market, the previous period's rules have taken measures to expand the warehouse, expanding from the original coastal warehouse layout to inland oil depots. At this stage, the delivery volume of deliverable oils can meet market demand. In the next step, the Shanghai Futures Exchange may continue to optimize deliverable oil types based on actual market demand. In addition, during the period of severe market volatility, within the rules of the previous period, starting from the trading side and the delivery side, many measures were taken, including margin and price limit adjustments, and diversified measures to ensure the smooth operation of the market, and the ability to serve the real economy was significantly improved.

Wang Fenghai pointed out that in the next step, the Shanghai Futures Exchange will continue to further open up to the outside world, optimize the rule system in operation, and improve the trading mechanism. Make overall plans and orderly promote the listing of natural gas and refined oil products, accelerate the listing of crude oil futures options and crude oil futures ETFs, and may introduce settlement price trading mechanisms (TAS) in the short term. Continuously improve the energy product sequence and enrich risk management tools. In the next quarter, the Shanghai Futures Exchange plans to launch international copper futures, and new products including shipping index futures are also under investigation.

The Asia-Pacific Petroleum Summit is an annual event in the global energy industry. It is one of the most influential and high-profile, full-covered petroleum industry communication platforms in the Asia-Pacific region. It is generally held in Singapore. This year, more than 40 industry experts from around the world shared their views on the current situation and future development direction of the global oil market online. About 450 guests from 40 countries and regions participated in this summit.

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