China has given a green light for the resumption of fuel oil futures trading at Shanghai Futures Exchange at an appropriate time after the exchange completes various preparations, an official with the China Securities Regulatory Commission (CSRC) said in Beijing Monday.

The official said the CSRC approved the application of the Shanghai Futures Exchange to trade fuel oil futures following the consent of the State Council, China's cabinet China's total consumption of fuel oil totals 44 million tons, including 23 million tons imported. The commission said the move was taken to allow the futures market to play a role in hedging price fluctuations and risk control in accordance with the decisions issued in February by the State Council on promoting the reform and opening up of its capital markets. China opened fuel oil futures exchanges in 1993 in Shanghai, Nanjing and Beijing, trading fuel oil and other products. But they were closed two years later as part of an industrial overhaul. Big oil users and some economists have been calling for the resumption of these futures to hedge price fluctuations in the international market. As a major oil consumer and importer, China needs its own oil futures market to enhance its impact on international prices.

Source: Xinhua