EXCLUSIVE China Agrees With US To Release Oil Reserves Near Lunar New Year – Resources – Community News
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EXCLUSIVE China Agrees With US To Release Oil Reserves Near Lunar New Year – Resources

A maze of crude oil pipes and valves is pictured during a tour of the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, US, June 9, 2016. REUTERS/Richard Carson

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  • The Lunar New Year falls on February 1
  • Amount of crude oil to be released depends on oil price levels

Jan. 14 (Reuters) – China will release crude oil from its national strategic stockpiles around the Lunar New Year holiday beginning Feb. 1 as part of a plan coordinated by the United States and other major consumers to lower global prices, sources told Reuters .

The sources, who have knowledge of talks between the world’s two largest consumers of crude oil, said China agreed to release an unspecified amount of oil in late 2021, depending on the price level.

“China agreed to release a relatively larger amount if oil is above $85 a barrel, and a smaller volume if oil remains near the $75 level,” a source said, without elaborating. .

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The release of crude oil stocks by China will occur around the Lunar New Year, the sources said. China is closed for the biggest annual holiday from January 31 to February 6.

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

China’s agreed reserve release is the culmination of a series of discussions, reported by Reuters in November, that the Biden administration has been conducting with other major oil consumers after tight supplies pushed global oil prices to multi-year highs. Read more .

Biden and top officials discussed the possibility of a coordinated release of crude oil supplies with close allies, including Japan, South Korea and India, as well as China.

The United States has been conducting crude oil swaps and sales from its reserves in recent weeks, while Japan and South Korea have also announced plans for crude oil sales. read more

China, which has long kept the details of its state reserves secret, held its first-ever public auction of crude oil reserves of about 7.4 million barrels, about half a day’s consumption in the country, last September. read more

In November, the National Food and Strategic Reserves Administration said it was “working on” a release of crude oil reserves, but declined to comment on the US’s request for the coordinated release to buyers. read more

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

Benchmark Brent oil futures stood at $84.79 a barrel and US West Texas Intermediate crude at $82.23 a barrel at 0730 GMT.

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Reporting by Timothy Gardner in Washington and Nidhi Verma in New Delhi; Written by Chen Aizhu; Editing by Florence Tan, Simon Cameron-Moore and Jacqueline Wong

Our Standards: The Thomson Reuters Trust Principles.