G7 Fuel Release Sends Oil Prices Tumbling as US Job Data Boosts Stocks

Oil prices tumbled on Friday as G7 nations announced a major release of fuel reserves, while US job data sparked a rally in Wall Street stocks. The G7 agreed to release 100 million barrels of diesel and crude oil over four months and pledged to avoid export restrictions on energy. US oil prices dropped as much as 5%, with Brent crude briefly falling below $100 per barrel. The move came after pressure from former President Donald Trump to tap into the EU's strategic diesel reserves.

The oil market remains tight due to refinery damage from the ongoing conflict, particularly affecting diesel supplies. Stephen Innes of SPI Asset Management noted that diesel shortages are now a broader economic issue, impacting freight, food prices, and inflation. He cautioned that tapping reserves ahead of winter is a risky signal.

Meanwhile, US stocks rose after weaker-than-expected job data showed employment grew by just 29,000 in September, well below forecasts of 90,000. The unemployment rate edged up to 4.2%, and job figures for July and August were revised down by 60,000. Analyst Bret Kenwell said the weak labor market may reduce pressure on the Federal Reserve to raise interest rates immediately.

The yield on the 10-year US Treasury note dipped below 5.2%, reflecting lower expectations for a Fed rate hike this month. Eurozone inflation surged to 3.8% in September, the highest in three years, driven by rising energy costs. Investors now see only a 20% chance of a Fed rate hike later this month, with most expecting action in December.