A yuan-denominated future oil contract could be an historical game changer.
A future oil contract is one where you buy a certain amount of oil for a future date. Since Monday, March 26, future contracts have started trading at the Shanghai International Energy Exchange. The Exchange is in a free trade zone which means that foreigners can trade on that market as well.
Some say it’s the end of the Petrodollar while others say it won’t be able to compete due to the ease with which the Chinese government interferes with free markets, especially one where there is a lot of speculation that you never lack in oil markets and because the Yuan is a government-controlled currency. More →