Oil jumped over 3% on Monday toward $108 a barrel as the release of strategic reserves by consuming nations failed to eliminate supply fears arising from Russia’s invasion of Ukraine and the lack of an Iranian nuclear deal.
The invasion in February heightened supply concerns that were already underpinning prices. Sanctions imposed on Russia and buyers’ avoidance of Russian oil have already led to a drop in output and raised fears of larger losses.
“Will the release of barrels from strategic reserves fill a shortfall caused by sanctions and buyer aversion to Russian oil? In a word, no,” said Stephen Brennock of oil broker PVM.
Brent crude was up $3.19, or 3.1%, at $107.58 a barrel by 1334 GMT. U.S. West Texas Intermediate crude gained $3.46, or 3.5%, to $102.73. Both contracts were down more than $1 earlier in the session.