Following Saudi Arabia raising crude sale prices in July, oil prices have spiked by more than $2 (£1.60) in early trade on Monday. This is thought to be an indication of the issues of oil supply despite OPEC+ agreeing to hasten its output rises over the next two months.
Brent crude futures increased by 1.5 percent or $1.80 (£1.44) to $121.52 (£97.25) per barrel at 11:19pm GMT following an intraday high of $121.95 (£97.60), increasing a 1.8 percent gain from Friday.
The price of Brent Crude has slightly reduced after passing $124 (£99.24) per barrel previously in the week which was the highest level since March.
The reduction will not impact consumers at petrol stations or help with inflation that is being felt across the globe.
The pandemic recovery combined with sanctions on Russian oil will continue to keep oil prices high, with a leading oil analyst warning that these prices are here to stay.
Matt Smith, an oil analyst for the Americas at Kpler told CNN Business that “triple digit oil prices” are likely to stay.
He added: “If Chinese demand comes roaring back after lockdowns and Russia continues to see production drop, then a retest of the high of $139 (£111.26) seen earlier this year is not beyond the realms of possibility.”
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SPI Asset Management managing partner Stephen Innes said: “Mere days after opening the spigots a bit wider, Saudi Arabia wasted little time hiking its official selling price for Asia, its primary market…seeing knock-on effects at the futures open across the oil market spectrum.”
The move by OPEC+ has been seen by most as unlikely to rise enough to meet demand following member countries including Russia failing to boost output as demand in the US skyrockets and China eases lockdowns.
Commonwealth Bank analyst Vivek Dhar said: “While that increase is sorely needed, it falls short of demand growth expectations, especially with the EU’s partial ban on Russian oil imports also factored in.”