China's growing ability to buy and sell millions of barrels of crude oil on the Asian physical market in a matter of minutes through its main trading firms has given China so much clout that other traders are often forced to follow its agreed prices.
Leading Chinese oil traders have cornered the market on several occasions since October last year. Early this month, Chinaoil, the trading arm of PetroChina, bought 5 million barrels of crude in just 30 minutes through Asia's main price-finding mechanism organized by Platts, part of McGraw Hill Financial.
Market power is shifting towards big consumers, with oil output at record highs and global demand slowing. China's main oil traders Unipec and Chinaoil have been able to cherry-pick the best offers and take advantage of cheap oil to build strategic reserves.
