Oil retreats from 2018 highs above $70 a barrel

Reuters

China's desire to open a domestic market to trade futures has grown as the nation's crude oil imports have boomed.

Shanghai crude oil futures opened up more than 6 percent with nearly 20 million barrels of the most-active September contract changing hands in the first 25 minutes as China debuted its oil benchmark. While global stockpiles are tightening in a sign that the Organization of the Petroleum Exporting Countries and its allies' production cuts are working, fears still remain that surging USA production could thwart those efforts.

The most-active September contract opened at 440.4 yuan per barrel from a reference point of 416 yuan, and jumped to as high as 447.1 yuan in the first few minutes.

Last year, China became the world's biggest buyer of foreign oil, surpassing the U.S. Yuan-denominated contracts are expected to boost the use of yuan in global trade in the long run.

Oil prices reversed earlier gains on Monday as concerns of a looming trade dispute between the United States and China weighed on global markets.

"The emergence of a new financial oil price benchmark in Asia has been long-awaited and may prove to have a significant influence over the oil markets in the years to come".

Brent has risen by more than 5 percent this month while WTI is up over 4 percent.

At least 64 people, some children, killed in Russian mall fire
The death toll was growing at a terrifying speed while dozens of people, including children, were initially announced missing. It has a parking lot for 250 cars, shops, a bowling, a children's center, a cinema, and a petting zoo, according to TASS .

Reuters reported that Russian Federation kept its spot as the largest crude oil supplier to China in February, a role it held in January and for the past two years on an annual basis.

"First-day trading of new contracts was expected to be active, but it was just a first step for China to gain pricing power", said Huang Lei, an independent commodity futures market analyst. USA crude benchmark West Texas Intermediate (WTI) reached the highest level in three years at $66.55 per barrel, before retreating to $65.53.

Despite this, there were concerns over regulatory interference, as seen in other Chinese commodities like iron ore and coal.

Crude oil futures slipped on Monday, but losses were capped by a rebound in stock markets and escalating Saudi-Iran tensions. Yuan-based futures will help promote the yuan as a global currency.

In Asia, Shanghai crude futures fell more than 2% in their second day of trading to 424 yuan ($67.85) a barrel from a last settlement of 433.8 yuan ($69.41).

At 0316 GMT, Shanghai's September contract was down 1.43 percent at 427.6 yuan ($68.33) per barrel.

Chinese exchanges count each side of a trade - the buy and the sell - as two lots, meaning the total oil changing hands was 20,328 lots, equal to 20.3 million barrels.

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