Research On Risk Management And Supervision Of Crude Oil Futures Market Under Open Conditions

China is the fourth largest oil producer, the second largest oil consumer and importer in the world. The price of the domestic oil products is dominated by the government or the state-owned enterprises for a long time, and the function of resource-allocated-by-the-market cannot be represented effectively. As a main country in crude oil production and consumption, China should play a more important influence in the international oil pricing process. Development of crude oil futures market is conducive to improving China’s crude oil market system and building the mechanism of market price of crude oil, furthermore, it will help to enhance the level of the futures market’s internationalization, and will help the market to play the decisive role in the process of resources allocation. On the other hand, crude oil futures denominated in RMB, it will help to establish the international commodity exchange mechanism which also denominated in RMB, and RMB will be promoted to be convertible gradually. China’s crude oil futures market will constitute a continuous 24 hours risk hedging mechanism with European and American, it means that this market will surely be of great significance as to ensure China’s energy and economic security, maintain Asia-Pacific oil market stability and guarantee the healthy development of regional economy.China’s futures market has always been a closed regional market since the establishment, an open crude oil market will meet with new situations and problems which have never met before. It will help Shanghai International Energy Exchange and regulatory authorities to strengthen the ability of risk prevention precisely with the evaluation of the traditional margin levels and with the analyses of the risk tolerance and control ability to the market while in the case of extreme volatility. Meanwhile, as the speculators and arbitrageurs provide liquidity in the markets, we can analyses that how the investor’s speculation or arbitrage behavior impact to the futures prices by considering the convenience yield and adaptive expectations. The different participate in this market should use the appropriate trading and risk control strategies which comply with their own characteristics.Today, IOSCO has already made protecting investors as one of the three main objectives of securities regulation, it’s necessary to set the market-access-level to investors, publish the rule of investors suitability, and design the proper trading code which foreign investors must use. At the same time, we should focus on the prevention and control of insider trading behavior. Economic globalization accelerates the internationalization flow of elements such as capital, technology and information, expands the scope of the resource allocation and risk management, the management modernization and the development of globalization of the futures market have become inevitable trend. The open crude oil futures market will become the more important aspects by which China can explore the denotative development and face the whole world actively. We should strengthen the cross-market and cross-border supervision constantly. Cross-border supervision is an important part of the global regulatory cooperation in financial markets, it is the important content of improving global governance structure. But it is also weak between countries. By constantly improve the communication and cooperation with countries and relevant international organizations, we can strengthen cross-border supervision of crude oil futures, and promote China’s increasing participation in and integrated into the global governance.