China said yesterday that it will release its reserves of gasoline and diesel to increase supply and stabilize prices in some areas. This came in a statement that analysts said was enough to reduce oil prices today.
Brent crude fell 0.2 percent and US West Texas Intermediate by 0.4 percent, after rising on Friday after the National Food and Strategic Reserves Administration in China announced on Sunday the release of gasoline and diesel reserves, in what some market watchers described as the first A statement of a kind aware of memory.
It is one of a number of attempts by Beijing to cool commodity price hikes that have slashed manufacturers’ profit margins. Earlier this year, China released other commodities from the reserves, including a rare release of crude oil and base metals, to cool prices.
“Rationalizing (oil) production should be more common than releasing oil reserves,” said Sanjik Te, an analyst at Beijing-based SIA Consulting.
He pointed out that Sunday’s move may be the first time that Beijing has announced the release of oil reserves.
He added, “Words are greater than actions, China learned this from (OPEC +)”, referring to supply communications from the alliance of major oil producers in the world, which could have an impact on lowering market prices.
Source: Reuters
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