"The presence or absence of major buyers or sellers can cause large speculative price swings in the exchange benchmarks", it said, adding that the sellers would also have to bear the risk arising from any adverse movements in Chinese exchange rates. Still, concerns over American shale oil remain, with analysts forecasting a gain in USA crude inventories last week.
Trading will resume at 1:30 p.m.
"The market is reacting to news that global trade war tensions are easing and geopolitical risks are escalating, but that doesn't mean concerns have diminished over rising USA output and supplies", Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone from Seoul.
"If the demand for (yuan contracts) came at the expense of the United States dollar, there is always a chance, however slim, that the Chinese yuan could displace the United States dollar as the main petro-currency".
While both contracts have been gaining, Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois said Brent has outperformed WTI.
"As things stand, it is a question of when, not if, the US withdraws from the agreement and fires a fresh sanctions salvo towards the OPEC nation", Stephen Brennock, an analyst at PVM Oil Associates Ltd., wrote about the Iran deal. The daily cost to store crude for delivery into the Shanghai exchange is set at 0.2 yuan a barrel, or at least twice the rate elsewhere, in a move seen as deterring excessive price swings.
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Shell International Eastern Trading the trading arm of Royal Dutch Shell, was heard to be the seller, said multiple sources that participate in the market, although a Shell spokeswoman declined to comment.
To attract more participation, China plans to waive income taxes for overseas individuals and institutions. According to the Shanghai International Energy Exchange data, 19 foreign brokers have registered for oil contracts during the last week.
While the nation hopes to establish a benchmark for global oil transactions, whether the Asian nation would achieve that goal has been the subject of hot debate.
Although crude and product futures slipped on Monday, most share prices for energy companies, especially refiners, were up, Mr Yawger said. While Shanghai has gone to some lengths to open the market to worldwide traders, very few of those players will want to find themselves at the mercy of a currency operating with a closed capital account.
Meanwhile, Wood Mackenzie said in a note that the impact of Shanghai crude futures on global crude prices will be marginal if there is not enough liquidity. Our short-term outlook and medium-term outlook on crude oil is bullish. "I still think there is a general reluctance from global investors to trade Chinese-based contracts".
Then there are the bulls, such as hedge fund manager Adam Levinson, who says the start of "petro-yuan" would be a "huge story" and increase the use of the Chinese currency in trade settlements.