A flame burns from a tower at Vankorskoye oil field owned by Rosneft company north of the Russian Siberian city of Krasnoyarsk. Source: Reuters
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  • Oil prices have risen on an expected demand recovery as China relaxes its tough COVID-19 restrictions and on doubts that a higher output target by OPEC+ producers would ease tight supply
  • Brent crude futures were up 76 cents at $120.27 per barrel as of 2:13 pm AEST
  • Similarly, US West Texas Intermediate (WTI) crude futures were up 83 cents at $119.33 a barrel after hitting a three-month high of $120.99 on Monday
  • Saudi Arabia raises the July official selling price (OSP) for its flagship Arab light crude to Asia by $2.10 from June to a $6.50 premium over Oman or Dubai quotes
  • Just last week, OPEC+ decided to boost output for July and August by 648,000 barrels per day — 50 per cent more than previously planned

Oil prices have risen on an expected demand recovery as China relaxes its tough COVID-19 restrictions and on doubts that a higher output target by the Organisation of the Petroleum Exporting Countries (OPEC+) produces would ease tight supply.

Brent crude futures were up 76 cents at $120.27 per barrel as of 2:13 pm AEST.

Similarly, US West Texas Intermediate (WTI) crude futures were up 83 cents at $119.33 a barrel after hitting a three-month high of $120.99 on Monday.

China’s two biggest cities, Beijing and Shanghai, have slowly returned to normal in recent days after two months of hard lockdowns in an effort to manage the COVID-19 Omicron variant.

Restrictions such as traffic bans and limited dining in restaurants were lifted yesterday in most parts of Beijing.

CMC Markets analyst Tina Teng said China, which is the world’s second biggest economy, could see a surge in fuel demand with the lift of traffic bans in the major cities and seaports returning to normal operations.

Saudi Arabia has raised the July official selling price (OSP) for its flagship Arab light crude to Asia by $2.10 from June to a $6.50 premium over Oman or Dubai quotes.

The price comes off an all-time peak recorded in May when prices soared due to worries of disruptions in Russian supplies.

Just last week, OPEC+ decided to boost output for July and August by 648,000 barrels per day — 50 per cent more than previously planned.

The increased target was spread across all OPEC+ members, but many — including Russia — have little room to ramp up output.

Elsewhere, US crude inventories likely fell last week while gasoline and distillate stockpiles were seen to be up.

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