Oil futures moved up in morning trading hours on Monday, in the wake of Saudi Arabia’s decision to hike June crude prices for most regions.
The waning hopes of an immediate ceasefire in Gaza is also reportedly added to the firming up of crude prices.
Brent crude futures climbed 28 cents, or 0.3 percent, to $83.24 a barrel, while US West Texas Intermediate crude futures were at $78.40 a barrel, up 29 cents, or 0.4 percent, Reuters reported.
Saudi Arabia raised the price of its flagship crude to Asia for a third consecutive month, as the kingdom tries to tighten the oil market to prevent a global surplus.
State-owned Saudi Aramco raised the June official selling price of Arab Light crude for customers in Asia by 90 cents to $2.90 a barrel above the regional Oman-Dubai benchmark, Bloomberg reported.
“After falling a little more than 7.3 percent last week due to easing geopolitical tensions, ICE Brent has started the new trading week on a stronger footing, opening higher,” the Reuters report said, citing a note by Warren Patterson, head of commodities research at ING.
This comes after Saudi Arabia raised June OSPs for most regions amid a tightening of supplies this quarter, he added.
Last week, both futures contracts posted their steepest weekly loss in three months with Brent falling more than 7 percent and WTI down 6.8 percent, as investors weighed weak US jobs data and the possible timing of a Federal Reserve interest rate cut.
The geopolitical risk premium in oil prices has also eased as talks for a Gaza ceasefire are underway.
In a sign supply may tighten, US energy companies cut the number of oil and natural gas rigs operating for a second week in a row last week, with oil rigs down seven to 499, in the biggest weekly drop since November 2023, Baker Hughes said in a report on Friday.
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