China will launch its own crude oil futures in March, the securities regulator said Friday, as the energy-hungry giant looks to wield greater influence on the international market by offering an alternative to the Brent and WTI benchmarks.
The China Securities Regulatory Commission (CSRC) said the contracts would be launched on March 26 on the Shanghai futures market.
It is the culmination of a long-standing ambition of China, which for a quarter century has nursed plans to launch its own oil contracts in order to exert greater influence on the market for the black gold.
The brief statement from the CSRC did not offer any details but Chinese press reports said the contracts would be open to foreign investors and denominated in yuan.
Launching its own oil contracts would therefore also serve to strengthen internationalisation of the yuan, as Beijing seeks to make it a world benchmark currency, even if drastic restrictions on its convertibility are holding back its expansion.
The new Shanghai-based contracts would offer an alternative to dollar-denominated Brent and WTI contracts traded in London and Wall Street which dominate the global crude market.
While the Chinese contracts may become a regional barometer of supply and demand in Asia, it seems unlikely that they will unthrone Brent and WTI in the short term as international benchmarks.
Trying to better tame the fluctuations in oil prices is a crucial issue for Beijing as the country's energy consumption continues to soar.
China last year surpassed the United States as the largest importer of crude, and its oil imports have further increased by 20 percent year-on-year in January, boosted by higher demand from independent refiners.