May 18, 2020 [Hellenic Shipping News] – China’s Shanghai International Energy Exchange (INE) said on Tuesday it will add 100,000 cubic metres of storage capacity at the crude oil futures delivery warehouse of a Sinopec Group unit.

 
The exchange has been increasing its total warehouse capacity for crude oil futures in the past month, following a Reuters report that traders, seeking to exploit a price anomaly by delivering crude into Shanghai crude futures contracts, were thwarted by a lack of available space.

The storage capacity at the Sinopec Petroleum Commercial Reserve in the eastern Zhejiang province will be increased from 700,000 cubic metres to 800,000 cubic metres, an INE statement said, without saying when.

China launched its internationalised yuan-denominated crude oil futures contract on the INE in March 2018 with the aim of establishing an Asian oil price benchmark.

Speculation in recent weeks on the INE contracts helped to boost Oman crude futures on the Dubai Mercantile Exchange and impacted term buyers in China. The INE accepts only certain grades of oil, including Oman.

The INE said in late April it was considering improving its crude oil futures delivery mechanism by allowing deliveries to fulfil contracts into storage tanks and ships held by market participants.