Oil Prices Plummet on Diesel Stockpile Drawdowns
Oil prices declined by around 3% on Friday, following reports of additional diesel and crude stockpile drawdowns. European diesel futures dropped more than 5%. By 0842 GMT, Brent crude had fallen $2.83, or 2.77%, to $99.48 a barrel, while West Texas Intermediate (WTI) crude dropped $3.35, or 3.61%, to $89.52 a barrel.
Ole Hansen, head of commodity strategy at Saxo Bank, stated the main pressure in the energy market was no longer crude availability as Middle East flows recover, but refined-product supplies, which have been constrained by reduced refinery capacity.
A French proposal to release 50 million barrels of diesel and International Energy Agency members drawing 50 million barrels of crude oil has been discussed among EU countries. The proposal aims to increase supplies and lower fuel prices in response to U.S. pressure.