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BEIJING, March 30 (Reuters) - 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 Shanghai Futures Exchange was at 418.9 yuan ($66.85) at the end of the morning session at 11:30 a.m. (0330 GMT), taking its cue from Thursday gains of about 1 percent for both benchmark Brent and West Texas Intermediate (WTI).
“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.
Shanghai crude rebounded from a low of 401.6 yuan notched on Thursday as investors started covering short positions after the rebound in the foreign oil benchmarks.
“Domestic crude market played catch-up with foreign markets,” said Yan Guangwen, crude analyst with Luzheng Futures, adding that a bearish crude outlook from independent refiners could again put prices under pressure in the near term.
Friday was the first day Shanghai contracts traded with other major financial markets in the United States and Europe shut for a holiday. Sunday is Easter, and many exchanges are closed for Good Friday.
Concerns of a trade war between China and the United States, a rising dollar and a gain in U.S. crude inventories could still dampen global oil prices, Wang Xiao said.
$1 = 6.2662 Chinese yuan Reporting by Meng Meng and Josephine Mason; Editing by Subhranshu Sahu and Tom Hogue