Oil rise after Saudi price hike

A TORC Oil & Gas pump jack is seen near Granum, Alberta, Canada May 6, 2020. (Reuters photo)

SULAIMANI (ESTA) — Oil prices rose on Monday after top exporter Saudi Arabia raised prices for its crude sold to Asia and the United States.

Brent crude futures gained $1.47 to $71.35 a barrel by 0539 GMT while U.S. West Texas Intermediate crude were at $67.77 a barrel, up $1.51.

On Sunday, Saudi Arabia raised January official selling prices for all crude grades sold to Asia and the United States by up to 80 cents from the previous month, Reuters reported.

The price hikes were implemented despite a decision last week by the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, to continue increasing supplies by 400,000 barrels per day in January.

Prices were also buoyed by diminishing prospects of a rise in Iranian oil exports after indirect U.S.-Iranian talks on saving the 2015 Iran nuclear deal broke off last week.

European officials voiced dismay on Friday at sweeping demands by Iran’s new, hardline government. The talks are expected to resume middle of this week.

“While the group [OPEC+] has maintained that the decision was purely based on market fundamentals, it is difficult not to see the hand of the U.S. at play, particularly given the visit this week of a U.S. delegation to the kingdom,” Reuters quoted consultancy JBC Energy as saying in a note.

“It is almost certain that the Iranian situation was discussed, and Saudi Arabia’s approval of the production hike suggests a compromise has been reached and that an improvement in relations with the Biden administration is on cards.”

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