Asia's spot crude market peaks on possible oil reserve release

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SINGAPORE: Asia's spot crude market has peaked after touching near two-year highs this week, as a possible release of oil reserves from top consumers globally dented sentiment and weighed on prices, trade sources said.

The administration of U.S. President Joe Biden asked big oil buyers like China, India and Japan to consider releasing crude stockpiles. China said it is working on a release of its crude reserves, while Japan and South Korea are reviewing the U.S. request.

In addition, Brent's premium to Dubai quotes has also cooled from eight-year highs hit earlier this month, and could make crude from the Atlantic Basin more affordable to Asian buyers again. "Prices did come off, so I guess the threat of one is more effective than actually doing it," said a senior crude trader in Singapore.

"I think it spooked the Shandong refineries, so all in all it's translating to a slowdown in the market," a second trader said. "Any oil released from the Chinese SPR needs to be refilled within 90 days," Energy Aspects analysts said in a note.

 

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