Oil prices fall 3% on reports of talks over diesel and crude stock releases
Oil prices fell nearly 3 per cent on Friday following reports of talks on additional diesel and crude stock releases, easing concerns over tight global energy supplies. EU countries discussed a French proposal to release additional diesel stockpiles, in response to US pressure on European nations to unleash more supplies in an attempt to reduce surging fuel prices, Reuters reported, citing…
Oil prices dropped around 3% on Friday, with European gasoil futures falling over 5%, as reports emerged of potential additional diesel and crude stock releases to alleviate tight global energy supplies. Brent crude fell $2.83, or 2.77%, to $99.48 a barrel, while West Texas Intermediate declined $3.35, or 3.61%, to $89.52 a barrel. Both benchmarks were on track for a weekly decline, with Brent down about 4.7% for the week and WTI lower by approximately 3.1%.
European gasoil futures, a key indicator for diesel prices, slipped more than 5% to $1,377 a metric ton. The decline came as EU countries deliberated on a French proposal to release extra diesel stockpiles, in response to US pressure urging European nations to release more supplies to counter rising fuel prices. EU governments discussed releasing 50 million barrels of diesel and 50 million barrels of crude oil, a move aimed at easing acute market tightness and averting a potential US diesel export ban.
The energy complex traded lower, with gasoil and ULSD leading the drop, as EU nations debated the release of fuel and crude stockpiles. Ole Hansen, head of commodity strategy at Saxo Bank, noted that the main concern in the energy market now lies with refined product supply, strained by limited refinery capacity and output in the Middle East and Russia.
Prices had previously risen in the prior session following reports that Chinese refiners halted oil product exports for October, as Beijing sought to maintain domestic stocks.
Meanwhile, the Wall Street Journal reported that the US was preparing to send a third aircraft carrier and up to 10,000 additional troops to the Middle East, amid President Trump's consideration of resuming strikes on Iran following the US midterm elections. While the recovery in oil flows through the Middle East, including pipeline bypasses, has accelerated, Barclays maintained that physical market fundamentals remained robust, with inventories continuing to decline and cargoes commanding steep premiums over forward prices.
The bank raised its fourth-quarter Brent forecast by $20 to $115 and extended its 2026 projection to $100 a barrel.
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