Key facts
- Oil prices settled lower on Wednesday.
- IEA agreed to speed up release of oil stocks to curb high fuel prices.
- Brent crude futures settled down 0.38% at $100.20 a barrel.
- US WTI crude futures settled down 1.3% at $88.28 a barrel.
- France will release 10 million barrels of diesel from strategic stocks.
- US crude inventories fell by 3.2 million barrels in the week ended October 2.
Oil prices settled lower on Wednesday following a choppy session after the International Energy Agency (IEA) agreed to speed up the release of oil stocks and prioritize diesel in a bid to curb record-high fuel prices. The ongoing conflicts in the Middle East and Ukraine, along with an approaching US storm, also influenced market sentiment.
Brent crude futures settled down 38 cents, or 0.38%, at $100.20 a barrel. US West Texas Intermediate (WTI) crude futures settled down $1.16, or 1.3%, to $88.28.
The IEA stated that completing previously announced releases as quickly as possible could bring around 100 million barrels to market. However, analysts and some governments suggested this figure did not necessarily represent a fresh intervention of that size. France announced it would release 10 million barrels of diesel from its strategic stocks, according to Franceinfo radio.
John Kilduff, partner at Again Capital, noted that the releases address Europe's supply crunch and could reduce pressure on US supplies. Meanwhile, the Energy Information Administration reported that US crude inventories fell by 3.2 million barrels to 424.1 million barrels in the week ended October 2, contrary to analysts' expectations of a 1.7 million-barrel rise. Distillate inventories also fell, while gasoline stocks rose.
Investors remain unconvinced about the sustainability of recent supply and export increases from the Middle East, according to PVM analyst Tamas Varga. Prices also found support from the approaching US storm and ongoing conflicts. Yemen's Houthis attacked Aden international airport with missiles and drones amid intensified fighting. Ukraine struck two Russian oil facilities while Russia launched missile and drone attacks on Ukraine, resulting in at least 15 deaths. Vitol CEO Russell Hardy stated that strikes on Russian energy infrastructure and refinery issues in the Middle East have tightened fuel markets.
In the US, forecasters predicted a storm forming in the Gulf of Mexico would become the first Atlantic hurricane of 2026 within two days and is likely to impact oil and gas facilities. The US Gulf of Mexico produced approximately 2.05 million barrels per day of crude oil in September, representing about 15% of the country's total production. A model forecast suggests that about 11.2 million barrels of oil production could be lost across the Gulf due to the storm.