Saudi Arabia raised prices sharply for July crude sales, prompting the price of oil to rise more than $2 in early trading on Monday.

Brent crude futures rose $1.80, or 1.5%, at $121.52 a barrel at 2319 GMT after reaching an intraday high of $121.95, stretching a 1.8% gain from Friday.

U.S. West Texas Intermediate (WTI) crude futures rose $1.63, or 1.4%, at $120.50 a barrel after reaching a three-month high of $120.99. The contract rose 1.7% on Friday.

Saudi Arabia’s state oil producer Aramco announced it was raising the price for its Arab Light Crude flagship to Asia to a $6.50 premium, up from a premium of $4.40 in June. The price hike happened after OPEC+ met and agreed to increase supply output in July and August by 648,000 barrels per day, 50% more than was planned.

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.”

Although the Kingdom increased the Arab Light OSP premium to Northwest Europe to $4.30 above ICE Brent for July, up from $2.10 in June, it did not raise the premium for barrels going to the United States, which remained at $5.65 above the Argus Sour Crude Index (ASCI).

It is assumed that despite OPEC+ announcing increases in production, it will likely not meet demand, as several member countries, such as Russia will not be able to boost output. Meanwhile as China emerges from lockdowns, and the United States continues to see high economic activity as peak driving season is approaching, demand is soaring.

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.”