China Oil Futures "Thundering Into Action" After Trump Exits Iran Deal

Washington’s renewed sanctions on Tehran supports China’s newly established oil futures, according to analysts, who, as RT reports, say that the sanctions can make the yuan a more preferable currency than the dollar on the oil market.

Since their launch in May, the interest in the renminbi-backed oil contracts has steadily surged. Traded daily volumes hit a record 250,000 lots last Wednesday, and the share of yuan contracts in global trading jumped to 12% compared to eight percent in March and 14% of WTI volume, up from 2% in April.

“The contract is thundering into action,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore, as quoted by Reuters.

 “It makes sense for Iran to begin selling oil under contracts denominated in yuan rather than dollars.”

China is the largest oil consumer in the world and also buys the most from Iran, a major OPEC producer. Beijing buys 25 percent of Iranian oil exports, which accounts for eight percent of its needs.

“The sanctions... can potentially accelerate this process of establishing a 3rd (oil) benchmark,” said senior vice president for derivatives in Singapore at financial services firm INTL FCStone, Barry White.

By using more yuan in the oil trade, Beijing both saves the costs of exchanging dollars and promotes the renminbi as a global currency, analysts say.

This week, Shanghai futures rose to a dollar-converted record high of around $76.50 per barrel, growing faster than rival benchmarks Brent and WTI.


veritas semper… Consuelo Fri, 05/18/2018 - 17:13 Permalink

Talking about the Russians : a very ,very important event is developing today and it looks like ZH is not willing to show it.

Frau Merkel is in Sochi, Crimea , having talks with Mr. Putin and the whole Russian government. Frau Merkel is accompanied by German industrialists .

If Germany is aligning with Russia/China ,this is the most important moment in the final chapter of the petro-f*cking-dollar burial . Because it is dead , just waiting the funerals.

Between the Iran deal f*ck up , Russian sanctions and threats of sanctions of German ecnomy (EU) , US is pretty much done.

And to make sure there is no escape for the US , the Donald dotard is having a trade war with China.

When Germany flips toward the East (and it will ,as they have the choice between going down with the US or prosperity with OBOR ) it's lights out for the petro-f*cking-dollar.

I like it when a plan for the killing of the Evil Empire comes together.

Mr. Putin is indeed a genius.

Look how he flipped Turkey ,the most important country in the ME for NATO/US.

Now he is flipping Germany .

Looks like Russian honey ( Mr. Bear likes honey) is more potent than the American stick.


PS: it will be no regime change in Iran . Deal with it.

Recently ,Murka tried a color revolution in Armenia , which has an economy growing at 7.5% and is in the  Eurasian Economic Union ,plus situated between Iran and Russia. Guess what ,after spending Millions , the new PM went to Moscow +said that Armenia remains a close ally of Russia . A color revolution done for nothing . Well ,it's your tax dollars, those 21 Trillions "lost".

In reply to by Consuelo

Max Hunter veritas semper… Fri, 05/18/2018 - 18:28 Permalink

That move against the USD is going to happen soon.  The US is making desperate moves that make no sense.  It may just be the US/ISISrael/Saud.. and all the Europlebs will do what is in their interest, not that of the US and Israel. US picking a fight with the EU and threatening them is foolish when all they have to do is join the Petroyuan/Russo initiative and they come out on top instead of fighting for their lives with mericans and chosenites. 

In reply to by veritas semper…

Guderian veritas semper… Sat, 05/19/2018 - 05:38 Permalink

Ilusive dreams and schemes.

Merkel cares shit for our country.

She is the best vasall, the US can imagine.

IMHO this trip is an attempt to not lose Russia as a market entirely, over the sanctions that Merkel has renewed.

She just fears a total fallout with our big biz. They are grumpy already, she doesn't want them mad.

Nothing will come outta this, except a few deals and niceties.

The USD trade is so much more important, that Merkel will not provoke any US discontent -except for the vital NordStream 2.

I'd be more than delighted, if you were right, but not a chance.

In reply to by veritas semper…

BarkingCat besnook Fri, 05/18/2018 - 18:37 Permalink

I served in the US Army.  Majority of the people I met there were below what I would consider intelligent. Marines were ever dumber. Air Force probably gets the most intelligent recruits with Navy coming in second.

If facing an enemy that can neutralize the US air superiority,  the Army and Marines will be in tons of trouble unless they have huge numerical advantage.

Not many nations can neutralize that air superiority.  Maybe none can. We won't know until there is a conflict against Russia or China.

In reply to by besnook

Guderian louie1 Sat, 05/19/2018 - 05:42 Permalink

You forget, that the US bases in Germany is the most powerful military force within our country -if not within the EU. The US doesn't have to invade, they are occupiers already.

BTW, the allies still have the right to override 'our' 'govt.'. So, the US could declare martial law tonight and we'd have to obey. Period.

In reply to by louie1

Scipio Africanuz BennyBoy Fri, 05/18/2018 - 17:03 Permalink

Have you seen the SHARPENED FANGS of the Aryan Lion? They'll make you wet your pants! The Lion is ancient, it knows where, and how to bite, and when it bites, it severes the spine of its prey! The hunter of the Lion, is caught in the valley of death, it WILL be suffocated, with the Lion biting down hard, on its air passage. The hunter WILL suffocate!...

In reply to by BennyBoy

Guderian Jack Oliver Sat, 05/19/2018 - 05:55 Permalink

How can you write such utter nonsense?!
It was the strategy of the political class that failed. The strategy being the invasion by jihadist proxies of the gulf cleptocrats and Sowdia. The idea was to avoid an endless occupation and/or failing exit, that comes so costly in Iraq and Afghanistan. It generated exports of arms, instead of expenses of war. 

Had the US (or rather NATO) invaded with full force, SAA and Assad would have been toast, long before Iran and Russia entered the circus.

After that failed, US succesfully created their own proxies, the Kurd aka SDF. They are occupying the oil rich areas, the strategically Euphrats and the trerritory needed for a pipeline. Plus a few US bases. All for very little expenses and casualties.

Only negative fallout is the anger of Turkey, but that will be settled another day. Erdogan needs help; his economy is in trouble and his currency is in the shitter. The US will find a way to make him happy and accept the reality.

In reply to by Jack Oliver

Countrybunkererd peopledontwanttruth Fri, 05/18/2018 - 15:33 Permalink

The Team will each down an entire bottle of their choice by 6:30 pm tonight.  5:30 if they already started.  That almost became what I would call an algo driven UOE this am.  An Uncontrollable Oscillating Event.

A very rare, good job boys and girls of the PPT, you deserve it.  We get at least one more "good" weekend, at least for "markets".

In reply to by peopledontwanttruth

Dickguzinya Fri, 05/18/2018 - 15:18 Permalink

Thus, China well continue to buy shitstainian produced crude oil.  I-scam/iran will then be able to continue pumping/producing because the demand will continue to be there, as we know that China has no allegiance to the US.  They will purchase shitstainian oil, leaving a plethora of US oil products on the market, resulting in the price of WTI going south.

divingengineer Fri, 05/18/2018 - 15:27 Permalink

They will destroy Iran’s oil producing capabilities before they let that happen.

Colloquially known as WAR. Expect a casus beli to do just that if they sell for anything besides USDs. 

Not right, but that’s the reality.

Iraq, Venezuela and Libya are three of the most recent examples.