DTN Oil Update
Oil Falls as EU Plans 100M Bbl Reserve Release
HOUSTON (DTN) -- Oil futures dropped on Friday driven by expectations of increased supply after G-7 leaders agreed to coordinate the release of 100 million bbl of oil reserves to ease high international prices. Crude benchmarks, however, gained 5% for the week as U.S.-Iran peace talks made no progress in recent weeks.
The G-7 proposal calls for an immediate release of reserves over four months, with a substantial share of the diesel released in the first 20 days.
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The release will carry out the G7's March 2026 commitments, taking into account those already fulfilled. The leaders said they will convene in the coming days to discuss possible additional diesel releases.
The statement followed a proposal by French President Emmanuel Macron for a joint EU-wide release of crude and diesel from strategic reserves.
France's proposal came the day after the Trump administration threatened European countries with cutting off flows of U.S. diesel unless they released fuel from emergency stockpiles. The U.S. has with the loss of product streams from the Middle East become Europe's largest supplier of diesel.
The Energy Information Administration reported that commercial distillate inventories recently fell to a record seasonal low, with ultra-low sulfur diesel stocks down more than 16% from a year earlier.
The December ICE Brent futures contract remained steady at $102.30 bbl from the previous trading session, while NYMEX WTI for November delivery fell $1.79 to $91.03 bbl.
Downstream, NYMEX ULSD for November delivery dropped $0.1271 to $4.5149 gallon, and front-month RBOB futures slid $0.1271 to $4.5149 gallon.
The U.S. Dollar Index edged down by 0.178 points to 101.71 against a basket of foreign currencies.
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