Oil prices witnessed a rise in trading on Friday, to their highest levels in more than 7 months, ending a series of losses that lasted two weeks, supported by fears of supply shortages.

Brent crude rose $1.66, or 1.9%, to settle at $88.49 a barrel.

It had risen during the session to $88.75 a barrel, the highest level since January 27.

US West Texas Intermediate crude increased $1.39, or about 1.7%, to $85.02 a barrel.

It earlier rose to $85.81, its highest level since November 16.

The price of Brent crude rose by 4.8% this week, recording the largest weekly increase since late July.

The price of US West Texas Intermediate crude oil rose 7.2%, its biggest weekly gain since March.

Saudi Arabia is expected to extend a large-scale voluntary cut in oil production by one million barrels per day to October, prolonging supply restrictions announced by OPEC and its allies in the bloc known as OPEC+ to support prices.

This was confirmed in action on Thursday when Russian Deputy Prime Minister Alexander Novak said that Russia, the world’s largest oil exporter, had reached a new agreement with OPEC to cut more supplies, and would spell out further production cuts next week.

ING analysts said in a report: “Russia made a voluntary cut in oil exports by about 500,000 barrels per day for the month of August and 300,000 barrels per day for the month of September”.

These cuts are likely to be added to the ongoing supply cuts by OPEC members and OPEC+, leading to a tighter outlook for oil supplies for the rest of the year.

In a related context, a special survey showed that the growth of Chinese industrial activities (China is the second largest oil consumer in the world) increased unexpectedly in August, according to a special survey published on Friday, as companies benefited from the high demand for new orders.

While official data on Thursday indicated that the manufacturing sector is contracting, the survey offers the country hopes for recovery after its slow recovery from the pandemic.

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