Brent oil falls below $100 amid Europe's talks on strategic reserves

Oil prices went down again after a sharp rise the day before. December Brent futures dropped below $100 per barrel amid reports that European countries are discussing releasing strategic oil and fuel reserves to curb prices.

This was reported by Bloomberg. The day before, Brent rose by more than 4%, but already on the morning of October 2, it lost part of that increase.

A new factor for the market was the discussions in Europe about the use of emergency reserves. France proposed a coordinated release of part of the crude oil and petroleum product reserves to increase market supply and ease price pressure.

The situation with diesel fuel remains especially tense. The Financial Times writes that European countries are holding urgent consultations on diesel reserves after pressure from the United States. France, Germany, the United Kingdom, Italy, and Ireland, among others, have joined the discussions, but no final decision has been made yet.

Washington is urging European partners to increase fuel supply on the global market. The American administration is trying to curb the sharp rise in diesel prices and is simultaneously considering the possibility of limiting its exports from the US if the situation does not improve.

According to Bloomberg, US Treasury Secretary Scott Bessent has already called on European countries to quickly fulfill previous agreements on the use of strategic reserves and provide additional fuel volumes to the market.

The current tension in the petroleum products market is linked to several factors at once. The war in the Middle East has complicated supplies through the Persian Gulf, and Ukrainian strikes on Russian oil refineries have reduced Russia's ability to export diesel and other fuels. Moreover, the problem is now more acute in the refined products market than in the crude oil market.

This changes the situation compared to previous days. As reported by Kurs Ukrainy, on October 1 oil was getting cheaper primarily due to signs of restoration of supplies from the Middle East. Now, additional pressure on prices is created by the possibility of direct intervention by European governments through strategic reserves.

At the same time, the situation remains unstable. The release of reserves may temporarily increase supply and lower prices, but it does not eliminate the problems with refining and diesel supply that have arisen due to military actions and the reduction of available export flows.

Based on materials from: Bloomberg, Financial Times