Oil Prices Surge Owing to Saudi Arabia's Decision to Raise Crude Prices

Oil futures slightly increased on Monday following Saudi Arabia's decision to raise June crude prices for most regions. Additionally, concerns over the potential escalation of the Israel-Hamas conflict in the oil-rich area contributed to the uptick.

Brent crude futures rose by 28 cents to $83.24 per barrel, while U.S. West Texas Intermediate crude futures reached $78.40 per barrel, up by 29 cents.

Saudi Arabia adjusted its official selling prices (OSPs) for crude sold to Asia, Northwest Europe, and the Mediterranean in June, indicating anticipated strong demand during the summer.

Warren Patterson, ING's head of commodities research, noted that ICE Brent began the week with gains after last week's decline due to reduced geopolitical tensions and Saudi Arabia's increase in June OSPs.

Both futures contracts experienced significant losses last week, with Brent falling over 7% and WTI down 6.8%, attributed to weak U.S. jobs data and uncertainty regarding the Federal Reserve's interest rate adjustments.

Moreover, the geopolitical risk premium in oil prices has diminished as talks for a ceasefire in Gaza progress.