Europe releases 42 million barrels of emergency oil stocks to cut diesel prices

Europe will release 42 million barrels of emergency oil stocks over the next three months, with half the total — roughly 21 million barrels — consisting of diesel, French Economy Minister Roland Lescure announced Thursday.

Lescure said France's portion amounts to 10 million barrels of diesel, which will begin reaching the market within days. He forecast a reduction of 12 to 18 cents per litre and expects prices to respond as early as next week.

The broader European release averages roughly 460,000 barrels per day over the three-month period, of which 230,000 barrels per day is diesel. The action forms part of the G7's October agreement to release up to 100 million barrels of crude and fuel stocks over a four-month span, which itself counts toward a 400-million-barrel emergency release coordinated by the International Energy Agency.

European diesel futures exceeded $200 per barrel in September. Middle Eastern refinery damage and Russian export restrictions have cut supplies from a market already at record prices; higher crude shipments from the Persian Gulf have not produced a matching recovery in finished fuel exports.

EU Energy Commissioner Dan Jorgensen on Wednesday called decades of refinery closures a mistake, ahead of Thursday's meeting of energy ministers in Luxembourg. One proposal under discussion would ease technical requirements to allow remaining plants to raise output.

Industry executives warned in early October that global oil stocks had been depleted to the point that another major supply disruption could send prices sharply higher.