Crude oil prices extended their losses early on Monday, after the biggest weekly drop in two years on supply hopes driven by a truce between the United Arab Emirates and the Iran-aligned Houthi group that would end operations troops at the border, alleviating some concerns about potential supply issues.

Additionally, increased US supply through the release of its Strategic Petroleum Reserve (SPR) also weighed on oil prices.

Benchmark Brent crude futures fell 0.8% to $103.6 a barrel after falling 13% last week, its biggest weekly decline in two years.

U.S. West Texas Intermediate crude was at $98.45 a barrel, down about 0.8% as both contracts fell $1 in early trading in Asia on Monday.

This week’s first losses come after oil prices stabilized at around 13% last week – their biggest weekly drop in two years – when US President Joe Biden announced the biggest release of oil reserves. According to the Japanese Ministry of Industry, member countries of the International Energy Agency (IEA) committed to another coordinated oil release at a special meeting,” said Rahul Kalantri, vice president for commodities at Mehta Equities.

The US administration has announced that up to 1 million bpd of oil will be sold from their SPR for six months from May to fill the gap until producers can increase production and bring back the supply in balance with demand.

The US Department of Energy officially announced a sale of oil from emergency reserves, while members of the International Energy Agency also agreed to release more oil on Friday.

“Joint efforts by the United States and its allies may temporarily offset supply shortages in 2022, but that may not be a long-term solution,” said Tina Teng, market analyst at CMC Markets. APAC & Canada, in a note. by Reuters.

“In addition, U.S. oil producers may be reluctant to increase production to keep profits high.”

Concerns about demand in China, the world’s top oil importer, persist as Shanghai’s most populous city has prolonged COVID-19 lockdowns.