China plans to launch a spot oil-trading center in Shanghai soon to better manage its access to energy, a top oil official said over the weekend.
Chinese industry sources said the oil trading center, with a target start date of June, would be jointly launched by State-run China National Petroleum Corp., China National Offshore Oil Corp., Sinopec Group and Sinochem.
Refined oil products including gasoline, diesel and fuel oil would be traded before moving to crude oil, sources said.
"It is more a spot market concept," said Ma Fucai, the president of CNPC, the parent of Hong Kong-listed PetroChina. He was speaking on the sidelines of the annual session of China's National People's Congress, which began Friday.
The market would be operated by a unit of CNPC, Ma said.
Some questioned whether such a market would be viable because top refiner Sinopec and CNPC control nearly 90 percent of China's 5.4 million-barrel-per-day market.
China is also expected to relaunch oil futures in Shanghai later this year. Fuel oil, the most liberalized oil product, will be the first to hit the board.
China shut down a petroleum futures market in 1995 after two years of operations following a government crackdown on rampant speculation.
The futures contract would offer Chinese players a yuan-denominated tool to guard against price volatility as the world's second-largest oil consumer becomes increasingly dependent on foreign oil.
China is expected to move cautiously on reintroducing derivatives after the crackdown in 1995, but industry officials have said they were hopeful that Beijing would give the green light this year.