Oil prices fell back below $100 a barrel on Friday as markets weighed possible releases of emergency diesel and crude stocks after prices had surged a day earlier on Middle East supply concerns.
Brent crude was down 2.47% at $99.78 a barrel at 1202 GMT on October 2, while US West Texas Intermediate was down 3.57% at $89.55, according to Reuters.
Those figures were intraday prices rather than final settlement prices.
The decline followed a sharp rise on Thursday, when Brent gained more than 4% as concerns about Middle East tensions and potential supply disruption pushed energy prices higher.
Friday’s reversal came as traders considered reports of discussions about releasing additional fuel and crude inventories to ease pressure on global energy markets.
A French proposal under discussion called for European Union countries to release 50 million barrels of diesel and for International Energy Agency members to consider a similar-sized release of crude oil, Reuters reported.
The discussions helped ease some immediate fears about tight fuel supplies, particularly in refined products such as diesel.
European gasoil futures also fell sharply on Friday, reflecting the market’s focus on possible measures to increase available fuel supplies.
The oil market remains highly sensitive to geopolitical developments. Middle East tensions, disruptions to refining capacity and changes in exports can quickly affect expectations about global supply.
China’s temporary suspension of refined-product exports has also contributed to concerns about fuel availability, while reduced refining capacity in parts of the Middle East and Russia has tightened some product markets.
For Pakistan, lower international crude and refined-product prices can be positive if the decline is sustained because the country imports a large share of its energy requirements.
Cheaper oil can reduce pressure on Pakistan’s import bill and may eventually feed into domestic fuel-price calculations, although local petrol and diesel prices also depend on exchange rates, taxes, levies, freight and the government’s pricing formula.
The move below $100 therefore represents some easing in international energy-market pressure after Thursday’s surge, but prices remain vulnerable to further changes in the Middle East and global supply policy.