Crude oil prices climbed higher on Friday amid concerns about tightening oil supplies following Russia and Saudi Arabia’s decision earlier this week to extend their supply cut till the end of the year.
West Texas Intermediate Crude oil futures for October ended higher by $0.64 or about 0.7% at $87.51 a barrel.
Brent crude futures were up $0.72 or 0.8% at $90.64 a barrel a little while ago.
Oil prices were also supported by Thursday’s data from the Energy Information Administration (EIA), which showed a big drop in U.S. crude inventories in the week ended September 1.
The EIA data showed U.S. crude inventory dropped by 6.307 million barrels last week. Gasoline stockpiles declined 2.666 million barrels last week, substantially larger than an expected drop of 0.950 million barrels.
Meanwhile, distillate stockpiles increased 0.679 million barrels last week, nearly three times the expected increase of 0.239 million barrels, the data showed.
Saudi Arabia announced its decision to extend its voluntary oil output cut of 1 million barrels per day for another three months.
Russia also extended its voluntary decision to reduce its oil exports by 300,000 bpd to the end of this year, raising speculation that prices will remain elevated through 2023.
Worries about the outlook for oil demand from China where the economy still remains fragile, limited oil’s uptick.
According to a report released by Baker Hughes this afternoon said the oil and gas rig count in the U.S. increased by one to 632 this week. However, the total count is still down 127 or 17% compared to the count around this time last year.
The report said oil rigs rose one to 513 this week, while gas rigs fell by one to 113, the lowest count since January 2022.
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