Brent climbs above $120/bbl after Saudi Arabia hikes crude prices
By Florence Tan and Sonali Paul
SINGAPORE (Reuters) -Oil futures jumped on Monday, with Brent rising above $120 a barrel after Saudi Arabia hiked costs for its crude gross sales in July, signalling tight provide even after OPEC+ agreed to speed up output will increase over the following two months.
Brent crude was up 91 cents, or 0.8%, at $120.63 a barrel at 0343 GMT after touching an intraday excessive of $121.95, extending a 1.8% achieve from Friday.
U.S. West Texas Intermediate (WTI) crude futures had been up 93 cents, or 0.8%, at $119.80 a barrel after earlier hitting a three-month excessive of $120.99. It gained 1.7% on Friday.
Saudi Arabia raised the official promoting value (OSP) for its flagship Arab mild crude to Asia to a $6.50 premium versus the typical of the Oman and Dubai benchmarks, from a $4.40 premium in June, state oil producer Aramco mentioned on Sunday.
The July OSP is the very best since Might, when costs hit all-time highs on account of worries of disruption in provides from Russia amid sanctions over its invasion of Ukraine.
The value hike got here regardless of a choice final week by the Group of the Petroleum Exporting International locations and allies, collectively known as OPEC+, to extend output in July and August by 648,000 barrels per day, or 50% greater than beforehand deliberate.
Iraq mentioned on Friday it plans to lift output to 4.58 million bpd in July.
Oil producers are “making hay whereas the solar shines”, Avtar Sandu, supervisor of commodities at Phillip Futures in Singapore mentioned, including that U.S. summer time driving demand and easing of COVID-19 lockdowns in China are anticipated to maintain costs excessive.
The OPEC+ transfer to carry ahead output hikes is broadly seen as unlikely to fulfill demand because the elevated allocation is unfold throughout all members, together with Russia that’s dealing with sanctions.
“Whereas that enhance is sorely wanted, it falls wanting demand progress expectations, particularly with the EU’s partial ban on Russian oil imports additionally factored in,” Commonwealth Financial institution analyst Vivek Dhar mentioned in a word.
Individually, Italy’s Eni and Spain’s Repsol may start transport Venezuelan oil to Europe as quickly as subsequent month to make up for Russian crude, 5 folks conversant in the matter instructed Reuters, resuming oil-for-debt swaps halted two years in the past when Washington stepped up sanctions on Venezuela.
Nonetheless, the amount that the businesses will obtain just isn’t anticipated to be massive, the folks mentioned.
(Reporting by Florence Tan in Singapore and Sonali Paul in Melbourne; Enhancing by Himani Sarkar)
