China agrees with US to release oil reserves ahead of Lunar New Year – sources, Auto News, ET Auto

The benchmark Brent crude futures were at $84.79 a barrel and US West Texas Intermediate crude was at $82.23 a barrel at 0730 GMT.

By Nidhi Verma and Timothy Gardner

China will release crude oil from its national strategic stockpiles around the Lunar New Year holiday as part of a plan coordinated by the United States with other major consumers to reduce global prices, sources told Reuters.

The sources, who are aware of talks between the world’s two major crude consumers, said China agreed in late 2021 to release an unspecified amount of oil depending on price levels.

“China has agreed to release a relatively larger amount if oil is above $85 a barrel, and a smaller amount if oil stays near the $75 level,” a source said, without giving further details. .

China’s release of crude stocks will take place around the Lunar New Year, which falls on Feb. 1, the sources said. China will be closed for the biggest annual holiday from January 31 to February 6.

China’s National Food and Strategic Reserve Administration did not immediately respond to a request for comment.

China’s agreed release of reserves is the result of a series of talks, reported by Reuters in November, that the Biden administration had with other major oil consumers after tight supplies pushed up global prices. oil to multi-year highs. .

Biden and his top aides have discussed the possibility of a coordinated release of crude stockpiles with close allies, including Japan, South Korea and India, as well as China.

The United States has been trading and selling crude from its reserves in recent weeks, while Japan and South Korea have also announced crude sales plans.

Oil prices rebounded above $80 a barrel this week, supported by supply disruptions in Libya and Kazakhstan, a drop in US crude inventories to their lowest since 2018 and an improving outlook for the fuel demand in Europe as governments ease COVID-19 restrictions.

The benchmark Brent crude futures were at $84.79 a barrel and US West Texas Intermediate crude was at $82.23 a barrel at 0730 GMT.

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Nevertheless, Brent and WTI prices are expected to rise for the fourth consecutive week, supported by supply issues in Libya and Kazakhstan and a drop in US crude inventories to 2018 lows. Some investors are also bullish on the fact that Omicron’s impact on the global economy and oil demand will be short-lived.

U.S. West Texas Intermediate (WTI) crude futures rose 38 cents, or 0.5%, to $81.60 a barrel at 02:24 GMT, adding to a 3.8% jump in the session former.

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Felix J. Dixon