Oil prices jump to 2023 high on supply concerns

The news: Oil prices jumped overnight to their highest level in 2023, after a steep drop in US crude stocks compounded worries of tight global supplies.

The numbers: Brent crude futures closed 2.8% higher at USD96.55 ($152), after breaching the USD97 a barrel mark during the session. US West Texas Intermediate crude futures (WTI) climbed 3.6% to USD93.68 a barrel. It comes after government data showed US crude stocks fell by a larger-than-expected 2.2 million barrels last week to 416.3 million barrels.

The context: Crude prices are rallying as the market worries about tight supplies heading into the northern hemisphere winter, following production cuts of 1.3 million barrels a day until the end of the year by Saudi Arabia and Russia. Potentially adding to tightness are worries that Russia could restrict exports of some oil products, after President Vladimir Putin ordered his government to ensure domestic retail fuel prices stabilise following a recent jump caused by rising exports.