Oil shoots up to year's all-time high of $93.62 per barrel on supply constraints — What's next?

Oil prices climbed on Thursday to their highest this year, as expectations of tighter supply outweighed worries about weaker economic growth and rising US crude inventories.

Brent crude was up $1.74, or 1.88%, at $93.62 by 11:24 a.m. ET (1524 GMT). The session high of $93.68 was its highest since November 2022.

US West Texas Intermediate crude (WTI) gained $1.57, or 1.8%, to $89.09. It also hit a 10-month high of $90.26.

On Wednesday, the International Energy Agency said Saudi Arabia and Russia have extended oil output cuts, which will result in a market deficit through the fourth quarter. Prices briefly pulled back on a bearish US inventories report before resuming their climb.

"That this genuinely bearish stock report only led to a brief temptation to sell speaks volumes and underlines the market mentality," said Tamas Varga of oil broker PVM.

Both benchmarks had slipped on Wednesday after a US supply report showing rising crude and refined product stocks.

Hedge funds have been buying crude oil futures for the past two or three weeks as "fundamentals continue to get stronger, driven mostly by heavy demand for both gasoline and diesel," said Dennis Kissler, senior vice president of trading at BOK Financial.

Both benchmarks remained in technically overbought territory.