European diesel prices jumped as much as 8 per cent on Wednesday after the International Energy Agency said member states would not add to the 400mn barrels of crude and refined products they committed to release in March. The agency's announcement follows a hastily arranged meeting of G7 leaders on Friday, where agreement was reached to release 100mn barrels of oil to the market over the next four months, prioritising diesel releases in the first 20 days.
After a meeting of IEA members on Wednesday, the energy watchdog said these 100mn barrels would come from the 400mn barrel stock release agreed in March, and would not include additional barrels. Members, however, agreed to speed up a planned release of oil stocks to the market and prioritise diesel "given the current tightness" in markets.
The lack of additional diesel being released to markets led benchmark European futures to rise as much as 8 per cent to $1,435.25 a tonne. They later fell back to $1,389.50, up 4.5 per cent on the day.
The IEA said 325mn barrels of oil had been released under the collective mechanism but that some countries had released additional barrels, including Japan. The agency said the full release of all pledged stocks would bring approximately 100mn barrels to the market. About half would come from European countries including France and Germany, while much of the remainder would be from the US.
Source: Financial Times Companies · Summarized by HeadlinesBriefing