SINGAPORE/SHANGHAI Nov 14 The Shanghai Futures
Exchange (SHFE) plans to launch an oil futures contract that
will compete to become the benchmark price for the 30 million
barrels of crude consumed in Asia every day.
For a related story:
Here are details of the planned contract from industry
officials with direct knowledge of the plan. The plans are
subject to change and are awaiting a greenlight from the central
Venue: Shanghai Futures Exchange
Contract unit: 100 barrels; versus 1,000 barrels for global
benchmarks WTI and Brent as China aims to also attract
Crude stream: medium sour oil with an API gravity of 30-34
and a maximum 2 percent sulphur content. The oil matches the
grades bought most by Chinese, Japanese and South Korean
refiners. Candidates include Oman, Dubai, Basra Light, Masila,
Upper Zakum, Qatar Marine. China's onshore crude Shengli, also a
medium, sour grade may be added, though not for delivery.
Contract durations: monthly contracts for the first twelve
months out. Contracts for March, June, September and December
for the following two years.
Delivery points: Bonded storage facilities in Dalian, in
northeast China and in Zhoushan and Zhenhai, both near Shanghai.
Crude delivered against the contract could actually be
shipped to China and its north Asian neighbours, in
Currency: Under the draft contract framework, the contract
would be priced in both the yuan and the U.S. dollar, and will
be able to be traded in bonded warehouses.
(Reporting by Florence Tan, Fayen Wong and Chen Aizhu; Editing
by Simon Webb)