LONDON (Reuters) – Oil prices topped $105 a barrel on Monday, as concerns persisted about tight supplies due to Russia’s attack on Ukraine and the lack of a deal on Iran’s nuclear deal, despite countries pulling out of strategic oil reserves.
The war in Ukraine, which erupted on February 24, exacerbated concerns about supplies that were already there and raised oil prices. And increased fears of a further decrease in supply as of this month due to sanctions imposed on Russia and the reluctance of buyers of Russian oil.
Brent crude rose 63 cents, or 0.6 percent, to $105.02 a barrel by 0805 GMT. US West Texas Intermediate crude rose $1.08, or 1.1 percent, to $100.35 a barrel.
The two crudes had fallen a dollar each in the beginning of trading in the markets today.
“Will the release of oil from the strategic reserves fill the shortage caused by sanctions and buyers’ reluctance to buy Russian oil?” said Stephen Brennock of oil brokerage BVM. The short answer: No.
Oil prices fell about 13 percent last week after US President Joe Biden announced an unprecedented withdrawal of US oil reserves, and member countries of the International Energy Agency pledged further withdrawals from the reserves. Crude hit $139 last month, the highest level since 2008.
It also supports oil by halting talks aimed at reviving the Iranian nuclear agreement, which would lift sanctions imposed on the circulation of Iranian oil. Today, Iran blamed the United States for the halt.
Some of the pressure on prices came from a truce in Yemen, which could ease supply threats from the Middle East.
The United Nations brokered a two-month truce between the Arab coalition and the Iran-aligned Houthi movement for the first time in the seven-year conflict.
Saudi oil facilities were attacked by the Houthis during the conflict, in addition to the interruption of supplies from Russia.
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