Oil Stock Markets
Brent and WTI crude oil futures dipped on Monday as concerns of a
looming trade dispute between the United States and China weighed on
global markets.
In Asia, Shanghai crude oil futures debuted strongly, both
in terms of volume and prices, with front-month contracts soaring as
much as 6 percent ISCc1 as investors bought into the world’s newest
financial oil trading instrument.
Looming over oil
markets, however, was the possibility of a full-blown trade war between
the United States and China battered Asian shares CSI300 .N225
on Monday. The falls came after U.S. President Donald Trump last week
signed a memorandum that could impose tariffs on up to $60 billion of
imports from China.
This weighed on crude oil
futures as well. U.S. West Texas Intermediate (WTI) crude futures CLc1
were at $65.49 a barrel at 0543 GMT, down 39 cents, or 0.6 percent, from
their previous close.
Brent crude futures LCOc1 were at $70.18 per barrel, down 27 cents, or 0.4 percent.
Crude was also weighed by a rise in the number of U.S. rigs drilling for
oil to a three-year high of 804, implying further rises in production
C-OUT-T-EIA, which has already jumped by a quarter since mid-2016 to
10.4 million barrels per day (bpd)
Financial oil markets have long been dominated by Europe’s Brent and America’s WTI.
Asia, despite being the world’s biggest and fastest growing oil consumer, has so far not had a benchmark.
That possibly changed on Monday, as China saw the launch of Shanghai crude oil futures <0#ISC:>.
Few
analysts doubt that Asia is overdue a financial oil price benchmark,
and that China with its vast consumer and production base is a prime
location for it.
Despite this, there were concerns over regulatory interference, as seen in other Chinese commodities like iron ore and coal.
That concern did not scare off global commodity trading giant Glencore (GLEN.L), which according to Chinese brokerage Xinhu Futures carried out the first trade on the Shanghai crude oil futures.
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