(Investing) – President Donald Trump on Friday said Europe had agreed to release a “massive amount” of diesel from their fuel inventories and that the process would “begin immediately.”
Separately, French President Emmanuel Macron said the Group of Seven nations, under the coordination of the International Energy Agency, would release up to 100 million barrels of emergency stocks over the next four months.
Heating oil extended losses after the announcements, with futures expiring in November last down 4.6% to $4.4247 a gallon.
Global diesel prices have surged amid the ongoing conflict in the Middle East and Ukrainian strikes on Russian energy infrastructure. In the U.S., the national average price of diesel hit a record high of $6.5276 per gallon on September 22, and currently hovers at $6.3726, according to AAA. The pressure at the pump comes ahead of key U.S. midterm elections in November.
Reuters earlier this week reported that the White House had urged the European Union to draw down emergency diesel inventories in an effort to lower global prices, citing two sources familiar with the effort. A Financial Times report later in the week said Trump was considering a range of measures, including a possible diesel export ban, to curb domestic prices.
The Trump administration is also considering regulatory changes that could broaden sales of red-dyed diesel, Reuters had reported. U.S. states have already taken the step, with Texas Governor Greg Abbott on Monday issuing a statewide disaster proclamation to allow expanded use of dyed diesel on Texas roads.
U.S. Energy Secretary Chris Wright told Fox News on Thursday that he was “highly confident” Europe could help ease prices of the refined fuel by drawing down emergency diesel inventories.
“I just brought together the G7 leaders to discuss the global energy situation. We agree to work in a coordinated manner to help bring down the prices of petroleum products, particularly diesel,” France’s Macron said in a social media post.
Aside from the emergency fuel release, Macron said the G7 had decided to “make production more flexible to produce at the maximum capacity of our refineries” and “take no measures to restrict the exchange of energy and petroleum products between partner countries.”
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