The unprecedented announcement comes amid surging energy costs in China
Oil tanks at an oil warehouse at Yangshan port in Shanghai, China. Picture: REUTERS/ALY SONG
In a late statement on Thursday, the National Food and Strategic Reserves Administration said the country had tapped its giant oil reserves to “to ease the pressure of rising raw material prices”. It didn’t offer further details, but people familiar with the matter said the statement referred to millions of barrels the government offered in mid-July.
China, the world’s largest oil importer, has built up a 220-million barrel reserve of the commodity over the past decade, according to Energy Aspects. The buffer differs from strategic petroleum reserves , held in the US and Europe, which are only tapped during supply outages and wars. China, however, is signalling it’s willing to use its reserve to try to influence the market.
Brent crude futures fell as much as $1.36 a barrel to $71.24 in London, before recovering to trade little changed. West Texas Intermediate had a similar move.China has been selling other commodities from its strategic reserves, including copper, aluminium and grains. In the past, Beijing rarely confirmed the releases, which have tended to filter into the market via trader talk. The public release is being seen by many as an attempt to maximise the impact of the move.
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