Brent crude oil futures climbed $1.32, or 1.3%, to $102.39 a barrel 0119 GMT, while U.S. West Texas Intermediate (WTI) crude oil futures were up $1.18, or 1.2%, $97.41 a barrel.
International Energy Agency member countries have agreed to release 60 million barrels on top of a 180 million barrel release announced by the United States last week to help lower prices in a tight market following Russia’s invasion of Ukraine.
Russia describes its actions in Ukraine as a “special operation” aimed at disarming its western neighbour.
Analysts said that even with the emergency release of oil stocks, supply remained tight.
“In addition to the huge release of global reserves, demand destruction and recession are currently the only mechanism for lower prices in a world without buffer stocks,” said Stephen Innes, managing director of SPI Asset Management.
National Australia Bank analyst Baden Moore said the latest release plus the coordinated IEA release announced on March 1 equates to 1 million barrels per day of additional May supply at the end of 2022, which would cap short-term prices. term.
“The additional supply reduces near-term market upside risk and likely avoids the need to reduce refineries near-term,” Moore said in a note, before adding a note of caution, “but the need to rebuild reserves, expected in 2023, adds tightness to the futures market where the fundamental supply outlook remains unchanged, tilting price risk to the upside.”
The deadlock in indirect talks between Iran and the United States on reviving a 2015 deal on Thran’s nuclear program has further delayed the possibility of a lifting of sanctions on Iranian oil, which keeps the tense march.
Political decisions are needed in Thran and Washington to overcome the remaining issues, according to the negotiators.