Shanghai Crude Oil Futures Revolutionize Price Discovery in China Market
The study looked at how well China's crude oil futures market in Shanghai sets prices compared to the spot market. They used different models to analyze this. The results showed that Shanghai's crude oil futures market contributes about half to price discovery, similar to the spot market. However, it is not as efficient as the WTI and Brent crude oil markets. Shanghai's market is still developing but has potential for price discovery in the future.