Oil rises to its highest level in 10 months

Oil prices rose to their highest level in 10 months on Friday, after China reduced banks’ cash reserve requirements to boost its economic recovery, and amid expectations that the cycle of raising global interest rates will soon end.

By 0027 GMT, Brent crude rose 46 cents, equivalent to 0.5 percent, to $94.16 a barrel, while US West Texas Intermediate crude rose 0.6 percent to $90.74. This is the highest trading level for the two benchmarks since November.

Ongoing supply concerns and expectations that the US central bank will keep interest rates unchanged have put oil prices on track to close higher for the third week in a row.

Higher interest rates increase borrowing costs for businesses and consumers, which may slow economic growth and reduce demand for oil.

“Betting on oil has become a favorite trade on Wall Street,” said OANDA analyst Edward Moya. “No one doubts that the OPEC+ decision at the end of last month will keep the oil market extremely tight in the fourth quarter.”

The International Energy Agency said this week that it expects Saudi Arabia and Russia to extend oil production cuts to lead to a market deficit during the fourth quarter.