Oil prices plunged to a two-week low after China announced plans to release the country's oil reserves to the market through public auctions to reduce the high cost burden on local mills.
US WTI traded gloomily at $ 68.06 a barrel in the Asian session, after declining 1.7% on Thursday. Meanwhile, Brent crude futures traded at $ 71.33 a barrel, after falling 1.6% in the previous session.
This release, is seen as an unprecedented intervention in the global market.
According to China's national reserve administration, the move will better stabilize the supply and demand of the domestic market and effectively ensure the country's energy security.
An analyst said the release from the reserves occurred because China needed to replace supplies they bought for September and October shipments from Shell in the U.S. Gulf of Mexico.
However, Royal Dutch Shell, the largest oil producer in the bay, has canceled some export cargo due to damage to the facility caused by Hurricane Ida.
About 1.4 million barrels a day of crude oil production is still stalled in the Gulf of Mexico and 1 million barrels a day of refining capacity is also still offline.
