KONTAN.CO.ID - LONDON. 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. Read Also: Musk Reveals 9.2% Stake in Twitter, Shares Surge 26% Crude dropped by about 13% last week after U.S. President Joe Biden announced a record U.S. oil reserves release and as International Energy Agency members committed to further tapping reserves. Crude had hit $139 last month, its highest level since 2008. "The massive release of 1 million barrels per day over a period of six months in the United States alone is likely to ensure that the oil market is no longer acutely undersupplied in the second and third quarters," Commerzbank's Carsten Fritsch wrote in a report.