(Yicai Global) March 26 -- China's long-anticipated crude oil futures started trading on the Shanghai International Energy Exchange (INE) today. The yuan-denominated contracts are the first Chinese futures that overseas investors can buy and sell without a presence in the country.

A total of 413 clients bid, with 261 contracts traded at CNY440 (USD70) a barrel, online news outlet The Paper reported. Turnover was much higher than expected. On overseas markets, US West Texas Intermediate (WTI) futures traded at about USD65.50 a barrel, while Brent crude was priced at around USD70.
 

Commodity trader and miner Glencore Plc was the first to snap up a Shanghai contract, The Paper said. Through Shirui Financial Services Co., the Anglo-Swiss multinational entrusted Xinhu Futures Co. to trade on its behalf. Overseas participants can trade in China because the INE is registered in the Shanghai Free Trade Zone.

Crude oil is one of the world's most actively traded commodities. Many more foreign institutional investors will be drawn to the Shanghai market as trading becomes more active and liquid, according to Yang Xidong, general manager of Xinhu Futures Co. That will be epoch-making for China as the world's biggest energy consumer is seeking to gain pricing power over the commodity.

Glencore's participation already shows that foreign traders are enthusiastic about China's new oil market, which allows them to take advantage of carry trades between China and Oman oil futures on the Dubai Mercantile Exchange, WTI contracts in New York and Brent in London.