Brent crude oil futures were up $1.80, or 1.5%, at $121.52 a barrel 2319 GMT after hitting an intraday high of $121.95, extending a 1.8 gain. % compared to Friday.
West Texas Intermediate (WTI) crude oil futures rose $1.63, or 1.4%, to $120.50 a barrel after hitting a three-month high of $120.99. The contract gained 1.7% on Friday.
Saudi Arabia has raised the official selling price (OSP) of its flagship Arabian light crude for Asia to a premium of $6.50 over the average benchmarks from Oman and Duba, up from a premium of $4. $40 in June, state oil company Aramco said on Sunday.
This movement came despite the decision taken last week by the Organization of the Petroleum Exporting Countries and its allies, collectively called OPEC+, to increase production in July and August by 648,000 barrels per day, or 50% more. than expected.
“Just days after turning the taps on a bit more, Saudi Arabia wasted no time in raising its official selling price for Asia, its main market…with repercussions for the opening of contracts across the oil market,” Stephen Innes, managing partner of SPI Asset Management, said in a note.
Saudi Arabia also raised the PSO of Arab Light to Northwest Europe to $4.30 above Brent ICE for July from a premium of $2.10 in June. However, it maintained the premium for barrels destined for the United States at $5.65 above the Argus Sour Crude Index (ASCI).
OPEC+’s move to bring forward production hikes is widely seen as unlikely to meet demand as several member nations, including Russia, are unable to increase production amid booming demand in the US in the midst of driving season and China easing COVID lockdowns.
“While this increase is sorely needed, it falls short of demand growth expectations, especially considering the EU’s partial ban on Russian oil imports,” said Vivek Dhar, an analyst. the Commonwealth Bank, in a note.