Europe Relents on Diesel Reserves as Oil Prices Ease

The US has successfully pressured Europe into selling part of its diesel reserves to alleviate record fuel prices.

The White House threatened to stop exports if the EU didn't comply, and it seems they have gotten their way. As a result, oil prices have dropped slightly in the last week, from $104.4 per barrel to $102.2 for North Sea Brent.

Ole Hansen of Saxo Bank notes that supply issues are no longer about crude oil availability, but rather the production and refining capacity of petroleum products.

Russia has extended its export ban on diesel fuel for another month, while increasing oil supplies from the Persian Gulf region. Barclays experts predict a further price increase, raising their forecast for Brent crude oil to $115 per barrel in the fourth quarter.