China's planned crude oil futures could become global benchmark: Expert

DUBAI - An international oil expert said on Tuesday that China's upcoming oil crude futures contract has the potential to become a global benchmark in the oil trade.

Dave Ernsberger, global oil director at Platts, a provider of energy and commodity information,?said at a media roundtable organized by Dubai-based research company Gulf Intelligence.

He said Chinese oil demand for crude from the Gulf Arab countries reached all-time highs this year.

"This gives reason for the world's second economy to launch its own home-made derivatives on the 'black gold,'" he pointed out.

In August, the Shanghai International Energy Exchange (INE) circulated a draft of the futures contract to market participants, saying the launch could happen as early as October, he said.

Oil futures contracts are used by energy traders and energy consuming firms, like airliners, to hedge themselves against anticipated price fluctuations.

"China is destined to eventually become the largest oil consumer in the future," said the expert who worked as an analyst from 2004 to 2009 in China and Singapore, among other Asian nations.

"China's consumption of oil will exceed that of the United States by 2034, according to the Unites States Information Administration," said Ernsberger.

In June, 90.05 percent of Oman crude went to China, he added.

In April this year, China's crude oil imports reached a record of 7.40 million barrels per day, he said, adding that the imports are expected to continue the upward path although the global economy faces challenges of lower growth in the emerging markets and Europe.

On Monday, China's National Bureau of Statistics posted a 6.9 percent growth year-on-year in the third quarter of 2015, slightly lower than the 7 percent seen in the first half of the year.