HOUSTON: Oil prices settled lower on Wednesday following a choppy session after the International Energy Agency agreed to speed up a release of oil stocks and prioritise diesel in a bid to curb record-high fuel prices as the Iran war squeezes global supplies.
Brent crude futures settled down 38 cents, or 0.38%, at US$100.20 a barrel. US West Texas Intermediate (WTI) crude futures settled down US$1.16, or 1.3%, to US$88.28.
The IEA said completing previously announced releases as quickly as possible could bring around 100 million barrels to market, although analysts and some governments said the figure did not necessarily represent a fresh intervention of that size.
France will release 10 million barrels of diesel from its strategic stocks, Franceinfo radio reported on Wednesday, citing unnamed sources.
"Europe is ground zero for this whole supply crunch ... and the releases address that and (take) some of the heat off the need for WTI to a degree. This should reduce some of the pressure on US supplies," said John Kilduff, partner at Again Capital.
Meanwhile, US crude stocks and distillate inventories fell while gasoline stocks rose last week, the Energy Information Administration said.
Crude inventories fell by 3.2 million barrels to 424.1 million barrels in the week ended October 2, the EIA said, compared with analysts' expectations in a Reuters poll for a 1.7 million-barrel rise.
Investors are not convinced that recent rises in supply and exports from the Middle East are sustainable, PVM analyst Tamas Varga said, adding prices also drew support from the approaching US storm and the continuing conflicts in the Middle East and Ukraine.
Yemen's Houthis attacked Aden international airport with missiles and drones, the country's transport ministry said, as fighting between the Iran-aligned group and Saudi-backed government forces intensified.
Attacks in the Middle East have curbed Brent's losses compared with those of US crude futures, Kilduff said.
US "requests and ideas" about Iran's nuclear program are at odds with Iranian demands, a senior Iranian official told Reuters when asked about US Vice President JD Vance's comment that Iran must cut enrichment to end the war.
Ukraine struck two Russian oil facilities while Russia pounded Ukraine with waves of missiles and drones, killing at least 15 people, Ukrainian officials said.
Strikes on Russian energy infrastructure and the loss of Middle East refining runs have tightened fuel markets, Vitol CEO Russell Hardy said on Tuesday.
In the US, forecasters said on Tuesday that a storm forming in the Gulf of Mexico would become the first Atlantic hurricane of 2026 within two days and is likely to hit oil and gas facilities.
The US Gulf of Mexico produced 2.05 million barrels per day of crude oil in September, according to the EIA, accounting for around 15% of the country's total production.
About 11.2 million barrels of oil production could be lost across the Gulf through the duration of the storm, a marked increase from the 7.1 million barrels impacted by Tropical Storm Bertha in July, according to a model forecast from consulting firm Earth Science Associates.
The storm is an "unwelcome complication for crude, raising the prospect of production and refining disruptions at a time when the market already has enough supply-side headaches," KCM Trade chief analyst Tim Waterer said. — Reuters
