In debut, Shanghai crude oil futures jump more than 6 pct

In debut, Shanghai crude oil futures jump more than 6 pct

In debut, Shanghai crude oil futures jump more than 6 pct

As Ciara Lee reports, around 12 million barrels of Shanghai's most-active September contract changed hands in the first 55 minutes of trade - and the buyers weren't just Chinese. Yuan-denominated oil futures on the Shanghai International Energy Exchange fell on their third trading day. West Texas Intermediate, the US benchmark, was down 0.46 percent to $65.58 per barrel.

Traders said most pressure ensued after the American Petroleum Institute (API) on Tuesday reported a surprise 5.3 million barrels rise in crude stocks in the week to March 23, against expectations for a decline of to 430.6 million barrels. The appointment of former U.N. Ambassador John Bolton as his national security advisor put war on the tongue of many analysts given his support for pre-emptive strikes on North Korea and disdain for Iran.

Financial oil markets have always been dominated by Europe's Brent and America's WTI. "Refinery maintenance is in full swing", causing "big builds in crude-oil stocks and big draws in products", he said. Chinese trader Unipec told Reuters it was the counterparty for the Glencore deal.

Oil traded above $65 a barrel as easing fears of a global trade war offset concerns over rising US crude stockpiles, boosting prices to near the highest level this year.

For China's regulators, the hope is that the futures will serve as a risk management tool for its oil companies, act as a price reference for industry participants, as well as help open the country's financial markets. China imports about 600,000 b/d of Oman crude.

"In the short-term, we believe price fluctuations will reflect domestic crude oil supply and demand".

The long-awaited step evoked a surge in global prices for oil with Brent Crude soaring to $71 a barrel for the first time since 2015.

Speculative retail and institutional investors also propped up the launch-day's liquidity, said Chen Tong, Shanghai-based senior crude analyst at First Futures.

The oil futures with delivery in September began the stock exchange session at a price of 440 CNY per barrel, and by noon almost 15,000 contracts changed their owners. "For the moment it is looking like both WTI and Brent are stalling", said Greg McKenna, chief market strategist at futures brokerage AxiTrader. This is especially important amid the ongoing tariff war between the United States and China.

Chinese exchanges count each side of a trade - the buy and the sell - as two lots, meaning the total oil changing hands was 15,371 lots, equal to 15.37 million barrels.

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