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2021.09.1610:22:00UTC+00Oil Gives Up Early Gains

Oil reversed early gains to edge lower on Thursday after China said it will continue to release state metal reserves to help overcome mismatches between supply and demand, and guide the prices of the raw materials to return to reasonable levels.

Last week, China said it was going to release some crude oil from its strategic petroleum reserve with an aim to "better stabilize domestic market supply and demand, and effectively guarantee the country's energy security."

The downside remained capped by data showing a sharp drawdown in crude stocks in the United States, the largest oil consumer in the world.

Benchmark Brent crude futures were down 4 cents at $75.42 a barrel, giving up earlier gains. U.S. crude futures were down 14 cents at $72.47.

Both contracts jumped around 3 percent in the previous session, and are up nearly 50 percent year-to-date on optimism about global growth despite the coronavirus pandemic.

China is the world's second-largest oil refiner and a major consumer of most other commodities.

As global oil prices hover near $75 a barrel, Beijing's initial sale from its strategic petroleum reserves will help the country to rein in inflation.

Analysts see the attempt very much a test, both in terms of internal mechanism and the impact on market sentiment.

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