© Reuters. An oil rig at the Shengli Oilfield in Shandong Province, photo from Reuters archive.
BEIJING (Reuters) – China said on Sunday it would release its reserves of gasoline and diesel to increase market supply and stabilize prices in some regions, in a rare statement analysts said was enough to bring down oil prices on Monday.
And West Texas Intermediate and West Texas Intermediate crude each fell 0.2 percent and 0.4 percent, respectively, 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 statement of its kind in 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 reserves, including rare releases of 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, but such moves are not usually confirmed in official statements.
He said Sunday’s move could be the first time Beijing has announced the release of oil products.
“Words are greater than actions, (China) learned that from OPEC +,” he added, referring to supply communications from the alliance of major world oil producers that could have an impact on lowering market prices.
(Prepared by Ahmed Sobhi for the Arab Newsletter)
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