Here comes the petro-yuan

Business & Technology

The Wall Street Journal reports (paywall) that “China is preparing to launch its own yuan-based oil futures contract, a move set to shake up the 96 million barrel-per-day global crude market currently dominated by trading in London and New York.”

  • No official launch date has been announced, but “traders and analysts in China say they expect trading in it to begin late this year or in early 2018.”
  • The WSJ says the move could “challenge the role of the U.S. dollar — currently the dominant commodity-pricing currency — by making it possible for crude exporters to sell the oil in another currency.”
  • However, the chaotic state of China’s existing commodities futures markets and the government’s record of frequent interference in domestic financial markets are likely to “arouse wariness among foreign participants.”