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We Don’t Need No Speculation: China Aims to Skirt Oil BubbleMarch 19, 2018
As China seeks to establish a global oil benchmark at home, it wants to prevent a speculative bubble in its upcoming crude futures.
The cost to store crude oil for delivery into the Shanghai Futures Exchange is said to be set at 0.2 yuan a barrel per day, equivalent to about 95 cents a barrel per month. That’s subject to further negotiations between counterparties.
“In discussing the new Shanghai Crude contract, there is concern about the high cost of storage at the delivery location," states Richard Redoglia, Matrix Global Holdings CEO. "The Matrix LOOP March auction is referenced as a price the market was willing to pay, in the current backwardation environment.”Read the full article here.