China’s Oil Futures Contract

China’s Oil Futures Contract by Rory – The Daily Coin

Here are links that explain China’s new oil futures contract. The website address was sent to me by a loyal reader of The Daily Coin.

The main website

http://www.ine.cn/en/

This article, linked below, was published in June 2017

China Securities Journal: Four Accesses for Overseas Investors to China’s Crude Oil Futures

Published July 13, 2017

China Securities Journal: Completion of Crude Oil Futures’ Across-the-Market Testing in Production Environment

Published July 24, 2017

This is the most interesting as it appears to be the framework for the contract that is to follow.

And a copy of the interim – Futures Trader Eligibility Rules can be found here

From: Shanghai International Energy Exchange
To: All Relevant Market Participants
Subject: Notice on Release of Operational Instructions for the Futures Trader Eligibility Rules of the Shanghai International Energy Exchange (Interim)

Operational Instructions for the Futures Trader Eligibility Rules of the Shanghai International Energy Exchange (Interim)

The word “gold” does not appear on any of these pages.

We will keep a close eye on the main website for additional information about the coming oil futures contract.

Here is the specifics of the contract that are currently known.

http://www.ine.cn/en/products/oil/standard/index_2.html

Contract text

 

Product
Medium Sour Crude Oil
Contract Size
1000 barrels per lot
Price Quotation
(RMB) Yuan per barrel
(no tax or duty included in the quotation)
Minimum Price Fluctuation
0.1 Yuan / barrel
Daily Price Limits
±4% from the settlement price of the previous trading day
Listed Contracts
Monthly contracts of recent twelve (12) consecutive months followed by eight (8) quarterly contracts.
Trading Hours
9:00-11:30 a.m., 1:30-3:00 p.m. (the Beijing Time), and other trading hours as prescribed by the Exchange
Last Trading Day
The last trading day of the month prior to the delivery month; The Shanghai International Energy Exchange is entitled to adjust the last trading day in accordance with the national holidays.
Delivery Period
Five (5) consecutive trading days after the last trading day.
Grades and Quality Specifications
Medium sour crude oil with the quality specifications of API 32.0 degrees and sulfur content 1.5% by weight
The deliverable grades and the price differentials willbe stipulated separately by the Shanghai International Energy Exchange.
Delivery Venues
Delivery Storage Facilities designated by the Shanghai International Energy Exchange
Minimum Trading Margin
5% of contract value
Settlement Type
Physical delivery
Product Symbol
SC
Listing Exchange
Shanghai International Energy Exchange

And the Appendixes

Appendixes

1. Delivery Unit
The delivery unit of standard crude oil futures contract is 1000 barrels. The delivery quantity shall be integer multiple(s) of the delivery unit.

2. Last Trading Day
The Last Trading Day of a crude oil futures contract shall be the last trading day of the month prior to the delivery month. The Shanghai International Energy Exchange (hereinafter referred to as “the Exchange”) reserves the rights to adjust the Last Trading Day in accordance with the national holidays so as to protect the legitimate rights of all parties involved in the futures trading and the social public interests, and to mitigate market risks. For example, if a national holiday of more than three consecutive days falls between the second last trading day, the last trading day, and one of the days in the delivery period of the contract, the Exchange may decide either to advance or to postpone the Last Trading Day and shall announce in advance.

3. Grades and Quality Specifications
Medium sour crude oil, of which the quality specifications are as follows: the gravity is 32.0 degrees API and sulfur content is 1.5% by weight. The deliverable grades and the premiums and discounts will be stipulated separately by the Exchange. The Exchange may adjust the deliverable grades and the premiums and discounts based on the market conditions.
The “crude oil” in this contract refers to the liquid hydrocarbons exploited directly from underground natural reservoir, or a mixture of its natural forms.

4. Designated Delivery Storage Facilities
Designated Delivery Storage Facilities will be designated and separately announced by the Exchange.

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The Daily Coin

Rory Hall, The Daily Coin. Beginning in 1987 Rory has written over 1,000 articles and produced more than 300 videos on topics ranging from the precious metals market, economic and monetary policies, preparedness as well as geopolitical events. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver, Silver Doctors, SGTReport, and a great many more. Rory was a producer and daily contributor at SGTReport between 2012 and 2014. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Don't forget to visit The Daily Coin and Shadow of Truth YouTube channels to enjoy original videos and some of the best economic, precious metals, geopolitical and preparedness news from around the world.