MELBOURNE (Reuters – Oil prices rose over $2 Monday in the early hours of trade after Saudi Arabia raised crude oil prices for July. It is a signal that supply is tight even after OPEC+ agreed on accelerating its output growth in the coming two months.

Futures rose $1.80 or 1.5% to $121.52 per barrel at 2319 GMT, after reaching an intraday peak of $121.95, which was a 1.8% increase from Friday.

U.S. West Texas Intermediate oil futures (WTI), were at $120.50, an increase of 1.4% after reaching a 3-month peak of $120.99. On Friday, the contract gained 1.7%.

Saudi Arabia has raised its official selling price (OSP), for the flagship Arab light crude oil to Asia, to $6.50 compared to the Oman benchmark, an increase of 4.40 percent in June.

Despite OPEC+’s decision to boost output by 648,000 barrels per hour in July and august, the Organization of the Petroleum Exporting Countries along with its allies (known collectively as OPEC+), the move was made. This is half the production that had been planned.

“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,” SPI Asset Management managing partner Stephen Innes said in a note.

Saudi Arabia has also raised the Arab Light OSP for northwestern Europe to $4.30 over ICE (NYSE.:) Brent in July. This is an increase of $2.10 from June. It maintained the $5.65 premium for barrels heading to the United States, which is still above the Argus Crude Index (ASCI).

The OPEC+ initiative to push forward output rises is seen by many as unlikely to satisfy demand. However, the demand is soaring in America during peak driving season. China has also begun to ease COVID lockdowns.

Vivek Dahar, an analyst at Commonwealth Bank, said that the rise is needed but not enough to meet demand growth. This was especially when you consider the EU’s ban on Russian oil imports.