By Adedapo Adesanya
Brent crude returned to the $90 region on Friday after it grew by 73 cents or 0.8 per cent to $90.65 per barrel, with the US West Texas Intermediate (WTI) crude rising by 64 cents or 0.7 per cent to $87.51 per barrel.
The improvement in the price of the commodity happened amid worries about tight oil supplies tackled by the extended cuts in production by Saudi Arabia and Russia this week.
For the week, both benchmarks were up about 2 per cent, following gains last week of about 5 per cent for Brent and about 7 per cent for WTI.
This week, Saudi Arabia and Russia, the leaders of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) extended their voluntary supply cuts of a combined 1.3 million barrels per day to the end of the year.
Saudi Arabia will extend its voluntary oil output cut of 1 million barrels per day for another three months until the end of December 2023 and Russia extended its voluntary decision to reduce its oil exports by 300,000 barrels per day to the end of this year, Deputy Prime Minister Alexander Novak said in a statement on Tuesday.
The Saudi and Russian voluntary cuts are on top of the April cut agreed by several OPEC+ producers, which extends to the end of 2024.
Both countries will review the cut decisions monthly to consider deepening cuts or raising output depending on market conditions.
Russia joining Saudi Arabia in extending the voluntary curbs allows the country to collect more revenues amid its war in Ukraine and despite European Union attempts to limit its income with a cap on Russian oil prices.
As a result of the development, most Russian oil continued to trade above the price cap.
Analysts noted that Saudi Arabia will find it difficult to end its cuts at the end of the year without triggering a price slide.
The oil market is still concerned about the demand outlook in China, which has had a sluggish post-pandemic recovery and stimulus pledges have fallen short of expectations.
Data on Thursday showed overall Chinese exports and imports fell in August, as sagging overseas demand and weak consumer spending squeezed businesses.
In the US, energy firms this week added one oil rig, the first weekly increase since June, according to energy services firm Baker Hughes.
Oil traders are also watching whether central banks in the U.S. and Europe will keep fighting inflation with interest rate hikes. Hikes can slow economic growth and reduce oil demand.
