China offers more than 20m barrels of crude to quell oil price rise: reports

Quantum Commodity Intelligence – China is to release more than 20 million barrels of oil from its strategic reserve in an attempt to pressure oil prices, according to Energy Intelligence, citing trading sources.

The world's second-biggest consumer of oil is offering between 3 to 4 million mt of mostly sour crude from its reserves – a figure that equates to between 21-29 million barrels.

"If all of that oil were released into the market over a single month, it would equate to 946,000 b/d, or more than double the volume that Opec+ will add to global supply from August," Energy Intelligence said in its note.

The news, which has been circulating this week, is attributed to trading sources who say between 3-4 million mt of sour crude was being marketed.

The news comes as crude prices tanked $5/b on Monday amid a risk-off approach to markets amid a rise in global infections of Covid-19 as well as news that OPEC+ had agreed to increase supply by up to 2 million bpd.

The release of crude comes as Chinese refinery runs rose 4% in June and imports crept up to 40 million mt, although independent refiner appetite is starting to diminish with imports expected to decline this month.

China's government has been battling to keep down commodity price inflation for months, shutting down agricultural price information providers and summoning the mining industry for talks regarding speculation.