Oil prices fell more than 2% on Friday, while European gasoil futures dropped around 5%, after reports that governments were discussing additional diesel and crude stock releases to ease pressure on global energy supplies.
Brent crude fell $2.57, or 2.51%, to $99.74 a barrel by 1035 GMT, while West Texas Intermediate dropped $3.53, or 3.8%, to $89.34.
Both benchmarks were heading for weekly losses, with Brent down about 4.1% and WTI around 3.2% lower for the week.
Diesel prices lead market decline
European gasoil futures, a key benchmark for diesel prices, fell around 5% to $1,380.50 a metric tonne.
Ole Hansen, head of commodity strategy at Saxo Bank, said the energy complex was trading lower as EU governments considered releasing fuel and crude stockpiles.
He said the discussions could help ease tight fuel markets and reduce the risk of a potential US diesel export ban.
France proposes new stock release
EU governments discussed a French proposal to release additional diesel reserves on Friday, according to a source familiar with the discussions cited by Reuters.
Under the proposal, European countries would release 50 million barrels of diesel, while International Energy Agency members would release 50 million barrels of crude oil.
The discussions follow pressure from the United States for European countries to release more fuel supplies in an effort to bring down prices.
Refined fuel supply remains under pressure
Hansen said the main pressure in energy markets had shifted from crude availability towards refined products, with refinery capacity and output constrained in parts of the Middle East and Russia.
Oil prices had risen in the previous session after Reuters reported that Chinese refiners had suspended October oil-product exports to preserve domestic supplies.
The market is also monitoring developments in the Middle East, including US military deployments and the wider conflict involving Iran.
Oil stocks and Middle East flows in focus
Hamad Hussain, senior climate and commodities economist at Capital Economics, said another release of strategic oil stocks could potentially push the market into a slight surplus if the recent recovery in Middle Eastern oil flows continues.
Barclays said flows through the Middle East Gulf had picked up, including through pipeline routes that bypass disrupted areas.
However, the bank said physical market conditions remained tight, with inventories continuing to fall and prompt cargoes trading at significant premiums over later deliveries.
Barclays raised its fourth-quarter Brent forecast by $20 a barrel to $115 and its 2026 forecast to $100.
Separately, Ukrainian President Volodymyr Zelenskiy said Ukraine had struck oil facilities in Russia’s Samara and Volgograd regions over the previous 24 hours.
Also read: Europe weighs diesel stocks release amid US pressure
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