LONDON, Oct 2 — Oil prices fell more than two per cent and European gasoil futures dropped about five per cent on Friday after reports of talks on additional diesel and crude stock releases, easing concerns over tight global energy supplies.
Brent fell US$2.57, or 2.51 per cent, to US$99.74 a barrel at 1035 GMT. West Texas Intermediate dropped US$3.53, or 3.8 per cent, to US$89.34 a barrel.
Both benchmark contracts were poised for a weekly decline, with Brent down about 4.1 per cent so far this week and WTI down around 3.2 per cent.
European gasoil futures, a benchmark for diesel prices, fell about five per cent to US$1,380.5 a metric ton.
"The whole energy complex trades lower, led by gasoil and ULSD, as European Union (EU) countries discuss releasing fuel and crude stockpiles to ease acute market tightness and help avert a potential United States (US) diesel export ban," said Saxo Bank's commodity strategy head Ole Hansen.
French proposal
A source familiar with the details told Reuters that on Friday, EU member states discussed a French proposal to release additional diesel stockpiles in response to US pressure on European nations to unleash more supplies to reduce surging fuel prices.
It added that the governments discussed a French proposal for European countries to release 50 million barrels of diesel, and for International Energy Agency members to release 50 million barrels of crude oil.
"This highlights that 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 Hansen.
Prices settled higher in the previous session after Reuters reported that Chinese refiners suspended oil product exports for October as Beijing looked to preserve domestic stocks.
Meanwhile, the Wall Street Journal reported that the US was sending a third aircraft carrier and up to 10,000 more troops to the Middle East as President Donald Trump weighed resuming strikes on Iran after the US midterm elections.
Capital Economics' senior climate and commodities economist Hamad Hussain said "taking a step back, another release of oil stocks could be enough to help tip the overall market back into a slight surplus if the recent pick-up in flows from the Middle East is sustained."
"The gradual recovery in oil flows through the Middle East Gulf (including pipeline bypass) has picked up pace of late," Barclays said in a note.
However, the bank noted that physical market fundamentals remained strong, with inventories continuing to be drawn, and prompt cargoes commanding steep premiums over forward prices.
The bank raised its fourth-quarter Brent forecast by US$20 a barrel to US$115 and lifted its 2026 forecast to US$100 a barrel.
Elsewhere, Ukrainian President Volodymyr Zelenskiy said on social media on Friday that Kyiv struck oil facilities in Russia's Samara and Volgograd regions over the past 24 hours.
