Oil prices hit US $ 120 as Saudi July price rise eclipses OPEC+ deal

REUTERS: Oil prices hit US $ 120 a barrel yesterday after Saudi Arabia raised crude prices for July and amid doubts that an increased OPEC+ monthly output target will help ease tight supply.
Brent crude firmed 32 cents, or 0.3 percent, to US $ 120.04 a barrel at 0858 GMT after touching an intraday high of US $ 121.95.

U.S. West Texas Intermediate (WTI) crude futures were up 40 cents, or 0.3 percent, at US $ 119.27 a barrel after hitting a three-month high of US $ 120.99.

Saudi Arabia raised the July official selling price (OSP) for its flagship Arab light crude to Asia by US $ 2.10 from June to a US $ 6.50 premium, the highest since May, when prices hit all-time highs due to worries of disruption in supplies from Russia. 

The price increase followed a decision last week by the Organisation of the Petroleum Exporting Countries and allies, together called OPEC+, to boost output for July and August by 648,000 barrels per day, or 50 percent more than previously 
planned.

The increased target was spread across all OPEC+ members, however, many of which have little room to increase output and which include Russia, which faces Western sanctions.

“With only a handful of... OPEC+ participants with spare capacity, we expect the increase in OPEC+ output to be about 160,000 barrels per day in July and 170,000 bpd in August,” JP Morgan analysts said in a note.Yesterday, Citibank and Barclays raised their price forecasts for 2022 and 2023, saying they expected Russian output and exports to fall by around 1-1.5 million bpd by end-2022. 

Separately, Italy’s Eni and Spain’s Repsol could begin shipping small volumes of Venezuelan oil to Europe as soon as next month, five people familiar with the 
matter told Reuters.