Reports that China will pay for oil in yuan are moving Shanghai crude futures

Shanghai September crude oil futures rose 3 percent by the midday break on Friday as investors placed bullish bets following reports that China is mulling steps to purchase crude in yuan.

The front-month contract on the exchange was at 418.9 yuan ($66.85) at 11:30 local time after Benchmark Brent and West Texas Intermediate (WTI) gained about 1 percent on Thursday.

"China's tax rebate plan will help support oil demand. Reports that China will pay for oil in yuan will also benefit the crude futures market," Wang Xiao, head of research with Guotai Junan Futures, said in a note on Friday, adding that the gain in Shanghai crude had outpaced the gain in Brent and WTI.

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