China announces state crude oil reserve sell-off to aid refiners
By Yashasvini on Sep 10, 2021 | 04:30 AM IST
China's state reserves administration has announced that it would release crude oil from its strategic reserve, for the first time into the market via public auction to lower prices. The state administration intends to ease the pressure of high feedstock costs on domestic refiners with its latest move.
The National Food and Strategic Reserves Administration said
that the release would occur in phases for integrated refining and chemical
plants, in a statement.
The state’s stockpiling agency said that it intends “to ease
the pressure of rising raw material prices.” It didn’t offer further details,
but Bloomberg said the statement referred to millions of barrels the government
offered in mid-July.
The administration did not specify the volume of crude it
would sell or when it would sell it. It said that the move will "stabilize
domestic market supply and demand and effectively guarantee the country's
energy security."
Brent crude fell as much as 1.9% following the announcement
before recovering to trade up 0.4% at $72.89 a barrel as of 11:02 ET.
China has previously sold other commodities from its
strategic reserves, including copper, aluminum, and grains but has rarely
confirmed the releases. Thursday’s announcement stated that the release was
carried out “with the approval of the State Council.”