Why are oil prices down today? G7 countries' oil reserve release plan to push crude rates lower

On Friday, October 2, oil prices dropped after news of coordinated efforts by G7 countries to release oil and diesel from strategic reserves. Brent crude fell below $100 a barrel, while US oil prices dropped 5% over the session. Governments were looking for ways to increase fuel supply and reduce pressure on prices.

The G7 initiatives to boost fuel supply

The G7 has agreed to release up to 100 million barrels of diesel and crude oil over four months, according to reports. The International Energy Agency is likely to coordinate the release. The proposal includes an early release of diesel because diesel prices have reached record levels in the US.


France had previously proposed releasing 50 million barrels of diesel from European reserves and another 50 million barrels of crude through IEA members. The European government officials discussed the proposal after the US urged its allies to boost fuel supplies.

Why are oil prices down today?

US President Donald Trump also stated Europe had agreed to release diesel reserves immediately. The US diesel price was $6.37 per gallon on Friday, after reaching a record $6.52 on September 22, according to AAA.

The Middle East conflict is however having an impact on the global oil flow and prices. The discussions therefore remain focused on the supply security and fuel costs.

US natural gas prices also fall

US natural gas futures were also under pressure. November futures fell 0.2% to $2.962 per million British thermal units, setting the contract for its lowest close since September 21.

The contract was down about 7% for the week after gaining about 10% the previous week. Calendar 2027 futures fell to $3.21, their lowest since February 2022. The 12-month strip fell to $3.06, its lowest since November 2024.

US Lower 48 gas production averaged 112.2 billion cubic feet per day in October, below the record of 113.3 bcfd in August and September. The warm weather is however likely to limit heating and cooling demand.