Oil prices are near $120 U.S. a barrel after Saudi Arabia issued a bigger-than-expected price
increase for the crude it is selling in the Asian market.
West Texas Intermediate (WTI) crude oil, the American benchmark, is trading right around $120
U.S. a barrel after earlier rising to its highest level in three months. Brent crude oil, the
international standard, has gained 0.2% to trade at $120 U.S. a barrel.
The latest price increases come after state owned Saudi Aramco raised its key Arab Light crude
grade for Asian customers by $2.10 U.S. a barrel to $6.50 U.S. above the benchmark that it
uses. The market was expecting a boost of only a $1.50 U.S., according to a market survey.
Saudi Aramco also increased its prices for northwest Europe and the Mediterranean regions in
a sign of confidence in demand for crude oil globally.
Oil prices have now rallied almost 60% this year as rebounding demand from economies
recovering from the COVID-19 pandemic coincided with a tightening market after Russia’s
invasion of Ukraine.
The Organization of the Petroleum Exporting Countries (OPEC+) last week agreed to
accelerate output increases following repeated calls by the U.S. to pump more crude oil. The
producer group said it would add 648,000 barrels a day for July and August, about 50% more
than the increases seen in recent months.
The fuel market has tightened considerably in recent weeks, just as the peak period for U.S.
demand kicks off with the summer driving season. Retail gasoline prices have rallied to a
record, while futures in New York hit a fresh high earlier today (June 6).
