Oil prices fall nearly 3% as Europe weighs releasing diesel and crude stockpiles
Oil prices fall nearly 3% as Europe weighs releasing diesel and crude stockpiles
Oil prices fall about three per cent on Friday, October 2, after reports that European countries are discussing the release of extra diesel and crude stockpiles, easing fears of a tight global fuel market.
Brent crude dropped $2.83, or 2.77 per cent, to $99.48 a barrel at 0842 GMT. West Texas Intermediate fell $3.35, or 3.61 per cent, to $89.52 a barrel. European gasoil futures, the diesel benchmark, fell over five per cent to $1,377 a metric ton.
Oil prices fall as Brent and WTI head for weekly losses
Both benchmarks are on track for a down week. Brent is down about 4.7 per cent so far this week, while WTI is lower by around 3.1 per cent.
The slide followed an EU discussion on Friday over a French proposal: release 50 million barrels of diesel from European reserves, and ask International Energy Agency members to release 50 million barrels of crude oil. A source familiar with the talks told Reuters the move responds to US pressure on Europe to unlock more supplies and bring down surging fuel prices.
“The whole energy complex trades lower, led by gasoil and ULSD, as EU countries discuss releasing fuel and crude stockpiles to ease acute market tightness and help avert a potential US diesel export ban,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Friday’s price moves
| Benchmark | Price | Change |
|---|---|---|
| Brent crude | $99.48 a barrel | -$2.83 (-2.77%) |
| WTI crude | $89.52 a barrel | -$3.35 (-3.61%) |
| European gasoil (diesel) | $1,377 a metric ton | Down over 5% |
Why diesel is the pressure point
Analysts say the real strain is now in refined products, not crude supply. “The main stress in the energy market is no longer crude availability, with Middle East flows recovering, but rather refined product supply, constrained by reduced refinery capacity and output across the Middle East and Russia,” said Ole Hansen of Saxo Bank.
Prices had risen in the previous session after Reuters reported that Chinese refiners suspended oil product exports for October to preserve domestic stocks.
What happens next
Barclays noted that oil flows through the Middle East Gulf, including through pipeline bypasses, have been recovering. Even so, inventories are still falling and prompt cargoes command steep premiums. The bank raised its fourth-quarter Brent forecast by $20 a barrel to $115, and lifted its 2026 forecast to $100.
The backdrop stays tense: the Wall Street Journal reported that the United States is sending a third aircraft carrier and up to 10,000 more troops to the Middle East as President Donald Trump weighs resuming strikes on Iran after the midterm elections.
Frequently asked questions
How far did oil prices fall on Friday, October 2?
Brent fell $2.83 to $99.48 a barrel and WTI dropped $3.35 to $89.52, both down around three per cent. European diesel futures fell over five per cent to $1,377 a ton.
Why are oil prices falling?
EU countries discussed a French proposal to release 50 million barrels of diesel, and for IEA members to release 50 million barrels of crude. The prospect of extra supply eased fears of a tight market, following US pressure on Europe to unlock fuel stockpiles.
What is driving the diesel shortage?
Analysts point to reduced refinery capacity and output across the Middle East and Russia, plus China’s suspension of October fuel exports. The strain is now in refined products rather than crude availability.
What is the US position on diesel exports?
Washington has pressed Europe to release diesel stockpiles and threatened a possible US diesel export ban to bring down fuel prices. Any European release deal would likely include a US pledge to avoid such a ban.
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