Brent rises above $ 120 / bbl after Saudi Arabia raises crude oil prices

A drill operates on February 10, 2019 in the Permian Basin Oil and Natural Gas Production Area in Lea County, New Mexico, USA. REUTERS / Nick Oxford / File Photo

SINGAPORE, June 6 (Reuters) – Oil futures rose on Monday as the Brent rose above $ 120 a barrel following Saudi Arabia’s July increase in its crude selling price, indicating tight supply even after OPEC + agreed to accelerate production increases over the next two months.

Brent crude was up 91 cents, or 0.8%, at $ 120.63 a barrel at 0343 GMT, extending gains by 1.8% since Friday, after hitting an intraday high of $ 121.95.

US West Texas Intermediate (WTI) crude futures rose 93 cents, or 0.8%, to $ 119.80 a barrel, hitting a three-month high of $ 120.99. It rose 1.7% on Friday.

Saudi Arabia raises official selling price (OSP) for its premier Arab light crude oil (OSP) to Asia from $ 4.40 premium in June to $ 6.50 (2222.SE) Said Sunday.

The July OSP was the highest since May, when prices touched an all-time high due to disruptions in supplies from Russia amid sanctions on its occupation of Ukraine. read more

Last week, the Organization of the Petroleum Exporting Countries (OPEC +) and its allies decided to increase production by 648,000 barrels a day or 50% more than previously planned in July and August, despite rising prices.

Iraq said on Friday it planned to increase production to 4.58 million ppm in July. read more

Oil producers “make straw when the sun shines”, said Avatar Sandu, products manager at Philip Futures in Singapore, who said summer US driving demand and easing COVID-19 lockdowns in China are expected to keep prices high.

The move to push OPEC + production forward is widely seen as unlikely to meet demand, given the increased allocation to all members, including Russia, which faces sanctions.

“While that increase is much needed, it is lower than demand growth expectations, especially due in part to the EU’s partial ban on Russian oil imports,” Commonwealth Bank analyst Vivek Thar said in a statement.

Separately, Italy’s Eni and Spain’s Repsol may start sending Venezuelan oil to Europe next month to replace Russian crude, five people familiar with the matter told Reuters, when the oil loan exchange was halted two years ago when Washington accelerated. Sanctions on Venezuela.

However, people said the amount companies receive would not be large. read more

Sonali Paul Report in Florence Dawn and Melbourne in Singapore; Editing Himani Sarkar

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