MELBOURNE (Reuters) – Oil prices rose more than $ 2 at the start of trading on Monday after Saudi Arabia sharply raised crude oil sales in July, an indicator of how limited supply is even after OPEC + agreed to accelerate the increase in its production over the next two months.
Brent crude futures rose $ 1.80, or 1.5 percent, to $ 121.52 a barrel at 11:19 p.m., after hitting a daily high of $ 121.95, extending profits by 1.8 percent. Friday.
West Texas Intermediate (WTI) crude rose $ 1.63, or 1.4 percent, to $ 120.50 a barrel after hitting a three-month high of $ 120.99. The contract rose 1.7% on Friday.
Saudi Arabia has raised the official selling price (OSP) for its leading Arab light crude oil for Asia to a mark-up of $ 6.50 compared to the Oman and Dubai benchmark average, compared to a premium of $ 4.40 in June, state oil Aramco said on Sunday.
The move came despite a decision last week by the Organization of the Petroleum Exporting Countries and Allies, collectively known as OPEC +, to increase production in July and August by 648,000 barrels a day, or 50 percent more than previously planned.
“Just days after the taps opened a little wider, Saudi Arabia lost some time raising its official selling price for Asia, its primary market … seeing the impact of open futures across the spectrum of the oil market,” said SPI Asset. Management partner Stephen Ines said in a note.
Saudi Arabia also raised the Arab Light OSP for Northwest Europe to $ 4.30 above ICE Brent in July, up from a $ 2.10 premium in June. However, it maintained a stable US $ 5.65 barrel premium above the Argus Sour Crude Index (ASCI).
OPEC +’s move to increase production is considered unlikely to meet demand, as several member states, including Russia, are unable to increase production as demand grows in the United States amid a peak driving season and China eases COVID blockade.
“Although this increase is urgently needed, it does not meet expectations for growing demand, especially given the EU’s partial ban on Russian oil imports,” Commonwealth Bank analyst Vivek Dhar said in a note.
(Report by Sonali Paul in Melbourne; edited by Sam Holmes)
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