EU Talks on Diesel and Crude Stock Releases Send Oil Prices Tumbling

Oil prices fell sharply on Friday after reports emerged of talks over additional diesel and crude stock releases. This move aims to ease concerns over tight global energy supplies.

Brent crude dropped by $2.83 (S$3.62) or 2.77% to $99.48 a barrel, while West Texas Intermediate fell by $3.35 or 3.61% to $89.52 a barrel.

The decline comes as the European Union countries discussed releasing additional diesel stockpiles in response to US pressure to reduce surging fuel prices. The EU countries' 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.

Ole Hansen, head of commodity strategy at Saxo Bank, said that the main stress in the energy market is no longer crude availability but rather refined product supply. He added that the whole energy complex trades lower, led by gasoil and ULSD, as EU countries discuss releasing fuel and crude stockpiles.