(Investing.com) – Oil was up on Monday morning in Asia. Investors are monitoring the release of supplies from strategic reserves from consuming nations, while a truce in the Middle East could ease supply concerns.
Brent oil futures was up 0.29% to $104.69 by 12:59 AM ET (4:59 AM GMT) and WTI futures edged up 0.12% to $99.39. Both Brent and WTI futures fell $1 when markets opened on Monday.
The United Nations helped broker a two-month truce between a Saudi Arabia-led coalition and the Houthi group aligned with Iran, the first in the seven-year conflict.
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Saudi oil facilities had recently come under attack by the Houthis during the conflict, adding to supply disruption from Russia.
"This was a threat to replenish, and a ceasefire would reduce that threat to supply," Price Futures Group analyst Phil Flynn told Reuters.
Saudi oil and gas condensate production fell to 11.01 million barrels per day (BPD) in March, from an average output of 11.08 million BPD in February, according to industry sources.
Western sanctions that followed Russia's invasion of Ukraine on Feb. 24. have also hit Russian oil refining and exports. Estimates of the Russian oil supply loss range from one to three million BPD.
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Oil prices tumbled about 13% during the previous week after the U.S. announced a plan to sell up to 1 million BPD of oil from the U.S. Strategic Petroleum Reserve (SPR) for six months starting in May 2022.
The U.S. Energy Department on Friday released a formal outline for the sale, while members of the International Energy Agency also agreed to release more oil on Friday.
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"The joint efforts of the US and its allies could temporarily balance off the supply shortfalls in 2022, but it might not be a long-term solution," CMC Markets APAC & Canada markets analyst Tina Teng said in a note.
"Also, the U.S. oil producers may be reluctant for an output increase to keep profit high."
Meanwhile, Shanghai extended a lockdown to curb the COVID-19 outbreak in the city, and fuel demand concerns in the world’s top oil importers persist.
China's Ministry of Transport expects a 20% fall in road traffic and a 55% drop in flights during the three-day Qingming holiday.