Oil Prices Plummet as Europe Considers Diesel Release

Oil prices plummeted more than $3 on Friday after reports of talks in Europe over releasing additional diesel and crude stockpiles to ease concerns over tight global energy supplies.

The Brent benchmark fell $3.06, or 3 per cent, to $99.25 a barrel at 1409 GMT, while West Texas Intermediate dropped $3.95, or 4.25 per cent, to $88.92 a barrel.

European gasoil futures, a benchmark for diesel prices, fell about 4.3 per cent to $1,386.75 a metric ton, with analysts attributing the drop to concerns over refined product supply constrained by reduced refinery capacity and output across the Middle East and Russia.

Ole Hansen, head of commodity strategy at Saxo Bank, noted that 'the main stress in the energy market is no longer crude availability' but rather refined product supply.

The EU discussed a French proposal to release 50 million barrels of diesel, and for International Energy Agency members to release 50 million barrels of crude oil, as US pressure mounted on European nations to unleash more supplies.