Price action

• April West Texas Intermediate crude rose $7.69, or 8%, to settle at $103.41 a barrel on the New York Mercantile Exchange after hitting an intraday high at $106.78. The settlement was the highest for a front-month contract since July 22, 2014, according to Dow Jones Market Data.
• May Brent crude, the global benchmark, added $7, or 7.2%, to close at $104.97 a barrel on ICE Futures Europe, the highest finish since Aug. 8, 2014.
• April natural gas settled at $4.573 per million British thermal units, up 3.9%.
• April gasoline added 5.3% to $3.089 a gallon. April heating oil rose 7.5% to $3.151 a gallon, the highest finish since February 2014.

Market drivers

The biggest impact of the IEA’s oil reserve release is “on market sentiment, given the delay and staggered nature between an announcement and the barrels hitting the physical market,” said Matt Smith, lead oil analyst, Americas, at Kpler. On Tuesday, the IEA announced an agreement for the release of 60 million barrels from member reserve.

Meanwhile, OPEC+ — the Organization of the Petroleum Exporting Countries and its allies, including Russia — will meet Wednesday to decide on production levels for April. The group is likely to “stay the course with the current easing schedule,” analysts at RBC Capital Markets wrote in a note dated Monday. OPEC+ has stuck to a plan to raise production by 400,000 barrels per day. Still, the RBC Capital Markets analysts said they “do not entirely rule out that there could be a strategy shift in the coming weeks, if there is an actual physical supply disruption or the Ukraine conflict devolves in such a way that the current OPEC+ partnership model becomes untenable.”

Meanwhile, shelling by Russian forces continued to pound civilian targets in Kharkiv, Ukraine’s second-largest city, on Tuesday, according to news reports, as satellite images showed a 40-mile convoy of Russian tanks and other military vehicles advancing on Kyiv, the capital. Russia’s Defense Ministry said it would target intelligence and communications targets in Kyiv,; Russian forces hit the capital’s TV tower, while news reports said Moscow was shifting to a strategy of pounding civilian areas in an effort to demoralize Ukrainian resistance.

Western nations over the weekend and on Monday put additional sanctions on Moscow, blocking selected Russian banks from the SWIFT interbank messaging system and taking aim at the country’s central bank in an effort to impede its ability to access foreign-exchange reserves. The moves, however, were designed to exempt energy flows from Russia, a major producer of oil and natural gas. But analysts said the sanctions appeared to also undercut demand for Russian commodities.

Commodities consumers are increasingly reluctant “to buy oil, liquefied natural gas, coal, metals and grains from Russia due to the uncertain legal situation,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note. “The fact that several Russian banks have been excluded from the international SWIFT payment system makes paying for deliveries more difficult. Furthermore, Western banks are refusing to finance the transactions,” he wrote.