, Columnist
Turning Sour on China's Oil Benchmark
Shanghai futures are off to a good start, but they're at the mercy of an illiquid currency.
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How serious is China about setting up its new Shanghai crude oil futures as a challenger to Brent and West Texas Intermediate?
It's certainly doing some things right. A functioning commodity benchmark requires crucial infrastructure. First, you need enough suppliers to ensure individual producers can't have too much influence. A spread of producers also creates stability, preventing situations like Brent saw last year, where the failure of a single pipeline risks sending prices spiraling out of control.