Due to the volatile international oil prices since the fourth quarter of last year, ICBC has seen continued surge in account-based crude oil transactions. Data shows that after exceeding 2 million barrels on January 13, the Bank’s daily account-based crude oil transactions exceeded 4 million barrels to 4.29 million barrels on March 13 with a record-high value of nearly RMB 1.3 billion. Meanwhile, the Bank’s account-based crude oil business has exceeded 60 million barrels in the first two months of the year, 75 times higher compared with the same period of 2014, and also 2.5 times the volume in the entire year of 2014.

Account-based crude oil is a new investment and trading product launched by ICBC in March 2013, the first of its kind in China. It is also an innovative financial service by which customers can buy or sell RMB- or USD-denominated crude oil units without withdrawing physical oil. The business comprises the North American account-based crude oil linked to WTI oil futures and the international account-based crude oil linked to Brent crude oil futures. In addition, the Bank also launched the account-based crude oil rollover function and the function of buy-after-selling (short positions) to further enrich trading functions of the account-based crude oil business. Whether the oil prices rise or fall, investors can have the chance to be long or short for earnings.

Industry insiders said that two main reasons are behind the record high transactions of the account-based crude oil business from the year to date. First, the oil prices have been fluctuated sharply since last year. The investment and hedging functions of ICBC’s account-based crude oil business have been fully leveraged. As crude oil prices are related to prices of daily necessities such as gasoline and diesel, when trading account-based crude oil products, customers can not only earn investment income, but also hedge against risks caused by price fluctuations of crude oil related commodities, reflecting the hedging function of the account-based crude oil product. For example, when transport expenses increase due to rise in gasoline prices, customers can buy ICBC account-based crude oil in advance and make up for  additional oil expenditure via the rise in crude oil prices to maintain life quality. In case of falling oil prices, customers can build “short positions” to earn the spread. Second, starting point for investment on the account-based crude oil business is low with easy trading. After completing risk tolerance capability assessment and product fitness evaluations at the Bank’s outlet or via its e-banking channels, customers can open the account-based crude oil business and handle transaction, pending order, and inquiry via Internet banking or telephone banking. Meanwhile, transaction starting point for the account-based crude oil is very low. Customers can participate in the transaction by trading 0.1 barrel (around RMB 30). The flexible trading mode, convenient channel, long trading hour and real-time clearing also promote the account-based crude oil transactions.