Crude oil prices extended their gains to near $109 a barrel early on Tuesday as the focus remains on supply concerns, driven by expectations for more sanctions on Moscow following the US' decision to build a case against Russia for war crimes in Ukraine.
The discovery of a mass grave and bodies shot at close range in Bucha, outside Kyiv, a Ukrainian town forces reclaimed from Russian troops, looked set to galvanize the US and Europe into imposing additional sanctions against Moscow.
Crude futures rose over 1 per cent early on Tuesday, with the benchmark Brent crude futures up over $1 per barrel at near $109 per barrel and US West Texas Intermediate futures near $105 a barrel.
Futures settled more than 3 per cent higher on Monday on the threat of more sanctions on Russia and following a pause in Vienna on talks to revive the Iran nuclear deal, which could put more Iranian barrels into the market. Iran blamed the US for halting the talks.
"On Monday, crude oil settled on a positive note as the US and Europe prepared to impose a fresh wave of sanctions on Russia for alleged atrocities committed by its forces against civilians in Ukraine," said Rahul Kalantri, Vice President for Commodities, Mehta Equities.
"The possibility of new sanctions is offsetting the impact in the global crude market of an extended-release by the US from the nation's strategic petroleum reserves to tame prices, ease the burden on consumers, and peg back inflation. Other countries have said that they'll also make oil releases," he added.
But the wild gyrations in commodities' prices since Russia invaded Ukraine are predicted to continue.
Indeed, both crude futures contracts briefly jumped more than $2 a barrel after reports that the International Energy Agency (IEA) was still working out details for a planned second round of coordinated oil releases.
Brent crude dropped by about 13 per cent last week after US President Joe Biden announced a record US oil reserves release and as International Energy Agency members committed to further tapping reserves. Crude had hit $139 last month, its highest since 2008.