Oil prices drop as China releases fuel reserves to beef up domestic supply

Brent crude futures fell 0.4% to $83.43 a barrel by 4:00am GMT. US benchmark West Texas Intermediate (WTI) crude futures lost 0.5%, trading at $83.17.

The downward trend came after China’s National Food and Strategic Reserves Administration announced that it had released gasoline and diesel reserves to the market on Sunday.

Crude prices are also dropping ahead of the meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, scheduled for November 4. Oil futures reached multi-year highs last week, following the decision of OPEC+ to stick to its planned output increase of 400,000 barrels per day in December. Experts expect oil prices to continue rising after OPEC+ confirms this decision at the upcoming meeting.

At the G20 Summit on Saturday, US President Joe Biden called on major G20 energy producers to increase oil production to support the global economic recovery, which is viewed by many as part of Washington’s efforts to pressure OPEC and allies into increasing global oil supply. The US has repeatedly urged the group to boost production efforts, seeing it as a way to curb rising gasoline prices.

However, OPEC+ has so far been increasing output within the limits set earlier this year.

Iraq’s state oil marketing company, SOMO, said on Saturday that it does not see the need to increase its production capabilities beyond OPEC+ plans.

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