Shanghai crude oil futures launched on Monday with mom-and-pop and institutional investors fuelling much higher turnover than many expected for China's new commodity benchmark that is aimed at dominating the Asian market.

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.

China surpassed the United States in 2017 to become the world's largest oil importer. Its demand is already a key determinant of global oil prices.

Iraq, the second-biggest producer within oil cartel Opec said on Monday that it also supported the producer cartel's agreement to cut oil output.

"Whether this will have any real bearing on the other crude benchmarks, I'm not quite sure, but traders love a new toy, so I applaud China for bringing in something that could stoke up some volatility", said Matt Stanley, a fuel broker with Freight Investor Services (FIS) in Dubai. On the other hand, the scholar predicted that once China's futures market becomes "more mature and transparent", the Shanghai oil futures contract will emerge as a full-fledged benchmark for global oil transactions. "For oil, we expect the supply deficit of the past couple of quarters to give way to a surplus, driven largely by strong growth in United States tight oil supply", Barclays Research analysts said in a note, a reference to U.S. shale production. If the US were to pull out of the deal, it would likely result in renewed economic sanctions on the Islamic Republic that could frustrate its oil exports and reduce the global supply.

Brent volumes are now low as much of Europe is already on holidays for Easter. Both futures contracts are commonly used by financial traders.

The crude futures are being traded on the Shanghai International Energy Exchange, a 5 billion yuan subsidiary set up by the Shanghai exchange in the city's free-trade zone in late 2013.

The contracts may not only help wrest some control over pricing from the main worldwide benchmarks, but yuan-denominated contracts could also promote the use of its currency in global trade-a key long-term goal for Asia's biggest economy.

"The recent rally in oil prices might have taken some by surprise as the underlying fundamental picture does not justify Brent being close to US$70 a barrel". Chinese trader Unipec told Reuters it was the counterparty for the Glencore deal.

This could be seen as competition to the Dubai Mercantile Exchange's (DME) crude futures and potentially the assessments published by price reporting agency S&P Global Platts.

But that "comes as Shanghai crude oil futures made a strong debut and was well received by investors", Kapadia said in emailed commentary.

Brent for May settlement rose to $70.97 a barrel on the London-based ICE Futures Europe exchange.

The oil futures with delivery in September began the stock exchange session at a price of 440 CNY per barrel, and by noon almost 15,000 contracts changed their owners. The biggest risk was that the USA could re-introduce sanctions on Iran.

At 9:24 a.m. (0224 GMT) prices were up 3.29 per cent at 430 yuan, with 19,122 lots, equal to 19.1 million barrels of oil, traded.

This weighed on crude oil futures as well.