SINGAPORE, June 6 Reuters Oil futures gained on Monday, with Brent rising above 120 a barrel after Saudi Arabia raised prices for its crude sales in July, signalling 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 threemonth 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 said on Sunday.

The July OSP is the highest since May, when prices hit alltime 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 Organization of the Petroleum Exporting Countries and allies, together called 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. 

Oil producers are making hay while the sun shines, Avtar Sandu, manager of commodities at Phillip Futures in Singapore said, adding that U.S. summer driving demand and easing of COVID19 lockdowns…