WTI crude futures pared early losses to trade above $100 a barrel on Monday as traders weigh tight supply, a coordinated release of strategic reserves from consuming nations and a Covid-19 outbreak in China. Last week, oil prices slumped about 13% after President Biden announced a massive release of crude from reserves to fight soaring prices that have been buoyed by the war in Ukraine. Up to 1 million barrels of oil a day will be sold from the Strategic Petroleum Reserve for six months starting in May.
Other countries will join the US as well although the IEA still has to announce the size of the agreed release. Meanwhile, the UN has brokered a 2-month truce between a Saudi-led coalition and the Houthi group for the first time in the 7-year conflict, which could normalize energy flows in the region. Elsewhere, demand concerns in China persisted as Shanghai extended its Covid lockdowns.