The major force is our great giant China:
The Chinese foreign currency reserve right now is too high for the government to risk keeping all of it by itself. The state foreign currency administration bureau has issued a new policy to “hide foreign currency in people” and given Chinese enterprises more flexibility to participate in foreign capital market. Considering the size of Chinese foreign trading surplus, this policy is channeling billions of dollars to international capital market.
One research team of the development and reform commission states that china should consider convert part of its high foreign currency reserve to strategic resources such as crude oil. This department is very powerful in Beijing’s policy making process and this idea defiantly will be spread and exercised by other government working units.
The Chinese oil industry was used to buy crude oil at spot prices rather than future prices. This caused the Chinese domestic gas prices at most time not matching those on international markets. With the Chinese oil companies more involving in broadening business oversea, more oil companies, investors and spectaculars start to participate in oil further markets.
In sum, the commodity buying power backed by Chinese folks is so strong and recently, it always drives the oil and gold prices rising much sharper during NYMEX Asian trading time.
