Why it matters
- Brent had settled above $100 a barrel on Thursday, so a move below that level is closely watched.
- A coordinated release would add both diesel and crude to the market at the same time.
- Cheaper fuel would ease pressure on inflation, which central banks are fighting with higher rates.
Oil prices fell sharply on Friday after reports that governments may release emergency fuel stocks.
Brent crude, the global benchmark, traded at $99.79 a barrel at 6:54 a.m. Eastern time, down 2.46%, according to OilPrice.com. U.S. benchmark West Texas Intermediate fell 3.78% to $89.36. Brent had settled at about $102.30 on Thursday, The National reported.
What is on the table
European Union countries discussed a French proposal under which European countries would release 50 million barrels of diesel and IEA members would release 50 million barrels of crude oil, The National reported, citing Reuters and unnamed sources.
European Energy Commissioner Dan Jørgensen told Euronews that the EU is discussing the timing of a release with all IEA members, not only the United States. "We've used it before, and we'll likely use it again," he said, according to OilPrice.com.
The U.S. government has urged European countries to release more of their stocks, OilPrice.com reported, citing Reuters.
Why prices are still high
Analysts said the risk of supply disruptions in the Middle East is still supporting prices, even as crude flows from the region recover.
"Though flow out of the Middle East, at least for crude, is normalising, upward pressure on prices continues as geopolitical risk persists," Kyle Rodda of Capital.com said, as quoted by The National.
Daniel Richards of Emirates NBD said reassurance about shipping through the Strait of Hormuz weighed on prices, but "renewed US military deployments to the region kept the risk premium alive," The National reported.
