China is set to release additional barrels from its strategic crude stockpiles ahead of the Lunar New Year holiday February 1st, according to sources at Reuters.
As part of the agreement struck in late 2021 with global oil consumers, China will release an unspecified quantity of crude into the market in coming weeks, with the volume released to be dependent on price.
Following news of the coordinated SPR release late last year and in the face of emergent Omicron news, WTI (NYSEARCA:USO) oil prices fell $13, before rallying $20 back to multi-year highs.
It will be interesting to track the success of the China SPR release, as US producers (NYSEARCA:XLE)(NYSE:PXD)(NYSE:EOG) prepare to disclose drilling budgets in coming weeks and the market begins to question OPEC's ability to hit production targets.
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