Oil prices hit 10-month high on extended supply cuts

The news: Crude oil prices jumped to their highest level since November 2022 after Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year.

The numbers: Benchmark Brent crude futures rose by USD1.04, or 1.2%, to settle above USD90 ($141) a barrel for the first time since November. US West Texas Intermediate crude (WTI) futures gained USD1.14, or 1.3%, to settle at USD86.69 a barrel, also a 10-month high.

The context: The jump in prices comes over investor concerns about potential shortages during peak winter demand in the northern hemisphere following the longer-than-expected extension of the supply cut. Both Brent and WTI futures have gained more than 20% since the end of June. While the Saudi supply cuts began in July, prospects of the US economy avoiding a hard recession have also helped lift oil demand and prices in recent months.