A drilling rig operates in the Permian Basin oil and natural gas production area in Lea County, New Mexico, USA, February 10, 2019. REUTERS / Nick Oxford / File Photo
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MELBOURNE, June 6 (Reuters) – Oil prices rose more than $ 2 on trade on Monday after Saudi Arabia sharply raised its crude oil sales prices in July, an indicator low supply even after OPEC + agreed to accelerate production increases over the next two months.
Brent crude futures rose $ 1.80, or 1.5%, to $ 121.52 a barrel at 11.19 GMT after hitting an intraday high of $ 121.95, extending a gain of $ 1. 8% compared to Friday.
U.S. West Texas Intermediate (WTI) crude oil futures rose $ 1.63, or 1.4%, to $ 120.50 a barrel after reaching a three-month high of $ 120.99. The contract gained 1.7% on Friday.
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Saudi Arabia raised the official selling price (PSO) of its flagship Arab light crude in Asia to a premium of $ 6.50 compared to the average of Oman and Dubai benchmarks, from a $ 4.40 premium in June, state oil product Aramco (2222.SE) said Sunday.
The move came in the wake of last week’s decision by the Organization of the Petroleum Exporting Countries and its allies, jointly known as OPEC +, to increase production in July and August by 648,000 barrels a day, up 50%. than had been anticipated.
“A few days after opening the thorns a little more, Saudi Arabia wasted little time raising its official selling price for Asia, its primary market … seeing side effects in futures open all over the world. oil market spectrum, “said SPI Asset Management. said partner Stephen Innes in a note.
Saudi Arabia also raised Arab Light OSP in northwestern Europe to $ 4.30 above ICE Brent in July, compared to a premium of $ 2.10 in June. However, it kept the premium stable for barrels going to the United States at $ 5.65 above the Argus Sour Crude Index (ASCI).
The move by OPEC + to advance the increase in production is considered unlikely to meet demand, as several member countries, including Russia, are unable to increase production, while demand is rising in the United States in the off-season. driving and China is easing COVID blockades.
“While this increase is much needed, it does not meet expectations of growing demand, especially with the EU’s partial ban on oil imports to Russia,” Commonwealth Bank analyst Vivek Dhar said in a statement. .
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Report by Sonali Paul in Melbourne; Edited by Sam Holmes
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