China first planned to launch its yuan-denominated futures contracts for crude oil in 2012 when oil prices exceeded US$100 a barrel, an apparent effort to secure bargaining power to price the commodity in light of the country's increasing reliance on imported oil.
Reuters reported that Russian Federation kept its spot as the largest crude oil supplier to China in February, a role it held in January and for the past two years on an annual basis.
In the 4-hourly timeframe, WTI failed to break the January highs of 66.50.
Traders said the falls came after the American Petroleum Institute (API) late on Tuesday reported a surprise 5.3 million barrels rise in crude sticks in the week to March 23, to 430.6 million barrels.
The global benchmark dipped 0.57 per cent, or 40 cents, to $69.71 per barrel, while West Texas Intermediate, the USA benchmark, fell below the $65 level to $64.60 per barrel, down one per cent. An industry report was said to show a 5.32 MMbbl gain in USA crude inventories last week, far higher than the median estimate in a Bloomberg survey before government data later Wednesday.
Brent volumes have been lower than usual as much of Europe is already on holiday for Easter.
So far, China has opened more than 6,000 trading accounts, including the country's oil majors and about 150 brokerages.
Still, China offers the potential for a deep, liquid market, buoyed by an explosion of interest from mom-and-pop investors that has supported its vast commodities derivative markets from apples to iron ore in Shanghai, Zhengzhou and Dalian.
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Initially, U.S. dollars may be used as deposit and for settlement, and in the future, more currencies will be used as deposit.
On the other hand, global stocks, which have proven to be a significant influence on crude prices, came off six-week lows due to expectations that the US and China will soon begin trade talks rather than undertake an all-out trade war.
"We were active with Glencore today and I've seen Trafigura in it and Freepoint".
The early involvement of big worldwide players was a morale boost to the fledging market, but state oil majors like PetroChina and Sinopec are expected to provide a significant amount of liquidity in the long term.
In Asia, crude oil is mainly priced against the Dubai, Oman and dated Brent benchmarks or Oman crude futures on the Dubai Mercantile Exchange.
McKenna said he hoped Shanghai crude gets a lot of traction and we end up with three established global benchmarks, but he cautioned that the first couple of days have been volatile.
"In the short-term, we believe price fluctuations will reflect domestic crude oil supply and demand".