Oil crosses $120 a barrel due to Saudi pricing, despite the OPEC + agreement from Reuters

By Laura Sanicola

(Reuters) – Oil prices remained largely unchanged after volatile trading on Monday, supported by Saudi Arabia’s July crude price hike, but amid doubts that an increase in production targeted by OPEC+ oil producers would ease supply tightness.

It rose 4 cents to $119.76 a barrel at 12:22 PM ET (1622 GMT) after touching an intraday high of $121.95.

US West Texas Intermediate crude futures rose 8 cents, or 0.1%, to $118.95 a barrel after hitting a three-month high of $120.99. The benchmark index fell by $1 earlier in the session.

Saudi Arabia raised the July official selling price (OSP) for its flagship Arab Light crude to Asia by $2.10 from June to a premium of $6.50 over Oman/Dubai prices, far from the highs recorded in May when prices surged to highs. Because of fears of disruption to supplies from Russia.

The price increase followed a decision last week by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively called OPEC+, to increase production for July and August by 648,000 barrels per day, or 50% more than previously planned, despite the restrictions. imposed on global refining. The ability to keep prices high.

“Crude oil inputs to US refineries have been reduced by about 6% compared to 4 years ago at this time with this reduction associated with the need for a lower crude oil cap while contributing to a severe tightening in the gasoline and diesel markets,” Jim Ritterbusch said. , president of Ritterbusch and Associates in Galena, Illinois.

The increased target has spread to all OPEC+ members, however, many of them have little room to increase production and among them Russia, which faces Western sanctions.

“With only a handful of…OPEC+ participants in spare capacity, we expect OPEC+ production to increase by about 160,000 bpd in July and 170,000 bpd in August,” JPMorgan analysts said in a note.

On Monday, Citibank and Barclays (LON 🙂 raised its price forecasts for 2022 and 2023, saying it expects Russian production and exports to decline by about 1 million to 1.5 million barrels per day by the end of 2022.

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