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Brent crude futures rose $1.10, or 1.3%, to settle at $86.24 a
barrel, while the U.S. West Texas Intermediate crude gained
$1.27, or 1.6%, to close at $82.82 a barrel. Both benchmarks hit
their highest levels since mid-April on Friday.
Saudi Arabia on Thursday extended a voluntary oil production cut
of 1 million barrels per day to the end of September, keeping
the door open for another extension. Russia has also elected to
reduce its oil exports by 300,000 barrels per day next month.
"With the production cut extended, we anticipate a market
deficit of more than 1.5 million barrels per day (bpd) in
September, following an estimated deficit of around 2 million
bpd in July and August," UBS analysts wrote in a note.
On the demand front, global oil consumption could grow by 2.4
million bpd this year, Russian Deputy Prime Minister Alexander
Novak said on Friday after a ministerial panel meeting of the
OPEC+ group - the Organization of the Petroleum Exporting
Countries and allies.
The meeting yielded no changes to output policy. The panel noted
that it could take additional measures at any time, which could
mean additional cuts if market conditions worsen, the UBS note
added.
UBS said it expects Brent prices to trade in the $85 to $90 per
barrel range over the coming months.
Earlier on Wednesday, the U.S. Energy Information Administration
reported that the country's crude oil inventory declined by a
record 17 million barrels last week as exports and refiners'
input of crude oil ramped up in the heart of summer travel
season.
Weighing on oil prices, data released on Friday showed the U.S.
economy maintained a moderate pace of job growth in July, but
solid wage gains and a decline in the unemployment rate pointed
to continued tightness in labor market conditions.
Additionally, the downturn in euro zone business activity
worsened more than initially thought in July and the Bank of
England raised its interest rate to a 15-year peak on Thursday.
(Reporting by Shariq Khan in Bengaluru; Additional reporting by
Natalie Grover in London, Arathy Somasekhar in Houston and
Sudarshan Varadhan in Singapore; Editing by Jason Neely, Kirsten
Donovan, David Gregorio, Leslie Adler and Deepa Babington)
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