Outlook on Energy Price Benchmark Market and Overview of SC Crude Oil Futures Mr. JIANG Yan Chairman, SHFE and INE 27 February 2019 Riyadh, Saudi Arabia
Outlook on Energy Price Benchmark Market and Overview of SC Crude Oil Futures
Mr. JIANG Yan Chairman, SHFE and INE 27 February 2019 Riyadh, Saudi Arabia
Disclaimer
Futures trading is not suitable for all investors, and involves the risk of loss. Futures are a leveraged investment, and because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money deposited for a futures position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles. And only a portion of those funds should be devoted to any one trade because they cannot expect to profit on every trade. All references to options refer to options on futures.
The information contained in this document is compiled and edited by the Shanghai International Energy Exchange (INE) for general introduction of crude oil market only. Although we endeavor to provide reliable, accurate and complete information, there cannot be guarantee that such information is accurate or complete and INE assumes no responsibility for any errors or omissions.
The information provided in this document is for reference only and should not be construed as a prospectus; a solicitation to buy or sell any investment. INE is not responsible for any profits or losses associated with using information in this document.
APAC,
35.20%
Africa,
4.10%M.E.
9.50%
N.A.
24.70%
Europe
15.30%
C&S.A,
6.90%CIS, 4.40%
Regional Oil Consumption in 2017
Steady Volume and Share Increase of Asia Pacific Oil Consumption
N.A.: North AmericaC&S.A: Central and South AmericaM.E.: Middle EastAPAC: Asia PacificCIS: Commonwealth of Independent State
N.A.
29.2%
C&S.A
5.4%
Europe
35.7%
M.E.
5.5%
Africa
3.0%
APAC
21.1%
Regional Oil Consumption in 1990
N.A.
29.7%
C&S.A
6.4%Europe
25.9%M.E.
6.8%
Africa
3.3%
APAC
27.9%
Regional Oil Consumption in 2000
Data:BP
3
30.00%
35.00%
40.00%
45.00%
50.00%
55.00%
60.00%
65.00%
70.00%
75.00% 美国 中国
China: 2nd Largest Oil Consumer, Highly Depend on Import
Data:BP4
- 5000 10000 15000 20000 25000
加拿大
德国
韩国
巴西
俄罗斯
沙特阿拉伯
日本
印度
中国
美国
2017 Oil Consumption by Country(kb/d)
U.S.
China
India
Japan
Saudi Arabia
Russia
Brazil
S. Korea
Germany
Canada
Data: EIA, National Bureau of Statistics, Customs
U.S. China
Crude Oil Consumption Dependency on Overseas Import
WTI Futures Brent Futures Dubai / Oman OTC Assessment
CME WTI
DMEOman
SHFEINE
ICEBrent
TOCOM
MCX
MOE
Regional Crude Oil Benchmarks
5
SC: Middle Eastern Crude CRF Price to North-East Asia
Middle East Crude FOB
SC
Nation Deliverable Crudes
United Arab Emirates DubaiUnited Arab Emirates Upper ZakumSultanate of Oman OmanState of Qatar Qatar MarineRepublic of Yemen MasilaRepublic of Iraq Basrah LightPeople’s Republic of China Shengli
RMB denomination, accept USD as margin
Net Pricing— No Tariff or VAT
Bonded Physical Delivery
Onshore and Offshore Participants
Medium Sour Crude
Currency
Trade Price
Delivery Mode
Participant Types
Underlying
Lot size: 1000 bbls
Contracts listed : up to 36 months
6
Price of Producing Region and Consuming Region
FOB Middle East Oil
Freight,Insurance
Other Cost SC Price
Producing Region Price
Consuming Region Price
Regional Supply and
Demand 7
Market Size Increases Steadily
• From launch day to 15-Feb-2019, accumulated trading volume of the China crude contract was 33 million lots, with daily average volume of 150k lots.
• On 7-Dec-2018, the single-day trading volume reached historical high at 360k lots.
• It took NYMEX WTI 3 years and IPE Brent 5 years to reach an average daily trading volume of 50k lots equivalent.
• At close of 15-Feb-2018, total market open interest was 37k lots, with daily average open interest at 21k lots.
• Note: above numbers are counting single-sided
Jan-2019 Trading Volume Market Share
CME WTI53%ICE Brent
35%
INE SC12%
DME Oman
0%
0112233445
05
10152025303540
2018
-3-2
620
18-4
-10
2018
-4-2
320
18-5
-820
18-5
-21
2018
-6-1
2018
-6-1
420
18-6
-28
2018
-7-1
120
18-7
-24
2018
-8-6
2018
-8-1
720
18-8
-30
2018
-9-1
220
18-9
-26
2018
-10-
1620
18-1
0-29
2018
-11-
920
18-1
1-22
2018
-12-
520
18-1
2-18
2019
-1-2
2019
-1-1
520
19-1
-28
2019
-2-1
5
SC Trading Volume and OI
Trading Vol Daily Avg Vol OI Daily Avg OI
8
Offshore Participation
Account Number Trading Volume
Onshore Offshore
Open Interest
Note: as of Feb 15, 2019
48 Overseas Intermediaries
9
Delivery Went Smoothly
Mar 26th
SC started trading
Jun 20th
First shipment of crude oil arrived at
Dalian
Jun 26th
First Crude Oil Warrant Issued for
500kb
Aug 31st
Last trading day of SC1809, which was the
first SC contract
Sep 7th
Delivery cycle completed with 601kb of crude oil delivered
60.1
14.40.8
209.6
251.3
4.2
0
50
100
150
200
250
300
SC1809 SC1810 SC1811 SC1812 SC1901 SC1902
In 10kb
By Feb 2019, 6 contracts have
completed their delivery cycles
(SC1809, SC1810, SC1811,
SC1812, SC1901, SC1902), with
a total amount of 5.4 million
barrels delivered.
• In April 2018, Shell and Unipec entered into a one-year crude oil trading contract using INE SC prices as benchmark
• Contract tenor: Sep 2018 – Aug 2019
• In Oct 2018, Unipec and one Chinese independent refinery signed a contract trading 350kb of middle eastern heavy and sour crude based on INE SC1812 prices
Total Size of Warrants Delivered
10
RankingExchange Name
Volume (100mn lots) YoY
Growth2018 2017 2018 20171 1 Shanghai Futures Exchange (SHFE) 12.02 13.64 -11.90%
2 2Chicago Mercantile Exchange Group
(CME Group) 11.82 11.32 4.43%
3 3 Dalian Commodity Exchange (DCE) 9.82 11.01 -10.84%
4 5Zhengzhou Commodity Exchange
(ZCE) 8.18 5.86 39.57%
5 4 Intercontinental Exchange (ICE) 7.97 7.85 1.54%6 6 Moscow Exchange (MOEX) 4.78 4.91 -2.64%
7 7Multi Commodity Exchange of India
(MCX) 2.30 1.99 15.97%
8 8 Hong Kong Stock Exchange (HKEX) 1.85 1.58 17.53%
9 9
National Association of Securities Deal Automated Quotations Group
(NASDAQ Group)0.24 0.52 -54.43%
10 10Tokyo Commodity Exchange
(TOCOM) 0.24 0.24 -2.32%
Chinese Futures Market and Futures Exchanges
Source: FIA
Global Exchange Traded Commodities Market Share (2001-2018)2018 Top 10 Global Commodity Exchanges
Vol(100 mnlots)
Mkt Share%
Trading Vol, Other Countries / RegionsTrading Vol, Mainland ChinaTrading Vol, United StatesMarket Share, United StatesMarket Share, Mainland China
Source: FIA
11
Outlook on Pricing Benchmark Market
Increasing uncertainties in oil supply, demand and macro economy
Increasing fluctuation in energy prices
Greater importance of benchmark market for price discovery and hedging
purposes
Opening up of Chinese futures market provides international solution
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