2023.09.1419:18:00UTC+00Oil Futures Settle Sharply Higher

Oil prices rose sharply on Thursday as concerns over the outlook for crude supplies outweighed worries about energy demand.

West Texas Intermediate Crude oil futures for October ended higher by $1.64 or about 1.9% at $90.16 a barrel, the highest settlement since early November, 2022.

Brent crude futures settled at $93.70 a barrel, gaining $1.82 or about 2%.

A report from the International Energy Agency earlier this week had said Russia and Saudi Arabia's move to extend their oil output cuts to the end of this year could result in a big deficit in global supplies from September through December.

The Organization of the Petroleum Exporting Countries (OPEX) said in its report said oil demand will rise this year, and there will be deficit in supply in the event of major producers continuing to cut production.

Data showing a notable increase in U.S. retail sales suggests the demand for energy continues to remain strong despite rising oil prices.

"Positive news about the US economy helped oil a little today as the consumer is still spending," says Edward Moya, Senior Market Analyst at OANDA.

"Oil is so bullish that even a strong dollar can't derail the rally. Energy traders might have a tight leash on this oil rally here, but the risks of a significant supply shortfall should have many traders eyeing the $100 level over the next couple of months," Moya adds.