Oil prices climbed higher on Tuesday after Saudi Arabia and Russia announced they will extend their voluntary production cuts by three months.
Saudi Arabia said today that it will extend its 1 million barrel per day voluntary oil production cut until the end of 2023. The kingdom, which first applied the 1 million bpd reduction in July, has been extending it on a monthly basis.
This 1-million cut is in addition to the reduction of 1.66 million barrels per day of other voluntary output declines that some members of OPEC have put in place until the end of the year.
Both Russia and Saudi have stated that they would review the supply cuts on a monthly basis, and modify them depending on market conditions.
West Texas Intermediate Crude oil futures for October ended higher by $1.14 or about 1.3% at $86.69 a barrel. WTI crude futures rose to a 10-month high of $88.07 a barrel earlier in the session.
Brent crude futures settled at $90.04 a barrel, gaining $1.04 or about 1.2%.
Oil prices fell earlier in the session as weak service sector data from China, the world's second largest economy and largest crude importer, fueled demand concerns.
Disappointing data from the euro area and the U.K. also signaled waning consumer demand and pointed to more headwinds for the global economy.
