Oil Price climbs to $120.40 per barrel on Monday

Oil futures gained on Monday, with Brent rising above $120 a barrel after Saudi Arabia raised prices for its crude sales in July.

The raise signals tight supply even after OPEC+ producers agreed to accelerate output increases over the next two months.

Brent crude firmed 68 cents, or 0.6%, to $120.40 a barrel at 0640 GMT after touching an intraday high of $121.95, extending a 1.8% gain from Friday.

U.S. West Texas Intermediate (WTI) crude futures were up 61 cents, or 0.5%, at $119.48 a barrel after earlier hitting a three-month high of $120.99. It gained 1.7% on Friday.

Saudi Arabia raised the July official selling price (OSP) for its flagship Arab light crude to Asia by $2.10 from June to $6.50 premium versus the average of the Oman and Dubai benchmarks, state oil producer Aramco (2222.SE) said on Sunday.

The July OSP is the highest since May, when prices hit all-time highs due to worries of disruption in supplies from Russia because of sanctions over its invasion of Ukraine.

The price increase came despite a decision last week by the OPEC+, to increase output in July and August by 648,000 barrels per day, or 50% more than planned.

Iraq said on Friday it aimed to raise output to 4.58 million bpd in July.

The OPEC+ decision to bring forward output increases is widely seen as unlikely to meet demand as the increased allocation is spread across all members, including Russia, which is facing sanctions.

On Monday, Citibank and Barclays raised their price forecasts for 2022 and 2023 on tighter Russian supplies and the delayed return of Iranian oil.

Citi analysts said reconfigured flows to Asia could mean Russian production and exports would not ultimately fall so much, but more in the range of 1 million to 1.5 million bpd.

Barclays expect Russian oil output to fall by 1.5 million bpd by end-2022.

Reuters/Hauwa Abu