Oil prices underwent a notable resurgence on Monday, predominantly fueled by a renewed commitment to voluntary oil supply cuts by two influential oil-exporting nations, Saudi Arabia and Russia. These two oil giants extended their pledge to maintain these cuts until the end of the year, effectively providing support to the oil market.

Brent crude futures, a key benchmark for international oil prices, exhibited a substantial increase of $1.25, equating to a rise of 1.47%. As a result, the price per barrel reached $86.14 by 1145 GMT. It recorded an impressive upswing, gaining $1.29 or 1.6%, elevating its value to $81.80.

The noteworthy escalation in oil prices, following a recent dip, was primarily attributed to the unwavering commitment from Saudi Arabia and Russia to maintain their voluntary oil supply reductions, thereby bolstering the confidence of the global oil market.

Saudi Arabia's affirmation on Sunday was instrumental in providing a boost to oil prices. The country's leadership announced its intention to uphold the additional voluntary cut of 1 million barrels per day (bpd) for the month of December. This strategic move is aimed at ensuring that Saudi Arabia's oil production remains at a steady 9 million bpd.

The prospect of extending these oil supply cuts into the initial quarter of 2024 remains a possibility. Several factors have contributed to this potential extension. The seasonally weaker oil demand that typically characterizes the beginning of each year, ongoing economic growth concerns, and the collective goal of producers and the OPEC+ alliance to ensure stability and balance in the oil market have all been cited by UBS strategist Giovanni Staunovo as factors that could drive the decision to prolong the supply cuts.

In addition to tracking developments in the oil market, investors and market analysts are closely monitoring forthcoming economic data from China, which is scheduled to be released on Tuesday. This data comes in the wake of relatively weak factory data from October, which was published the previous week. Analysts anticipate a year-on-year decline in exports for the month of October, which indicates a projected decrease of 3.3%. This figure suggests a slowdown compared to the 6.2% export decline observed in September, underscoring the importance of economic data in gauging the global economic landscape and its impact on the oil market.

Despite the positive momentum witnessed in oil prices on Monday, it is essential to note that the surge may have been moderated by developments within Chinese refineries. A noteworthy aspect is the reduction in crude throughput observed at these refineries, a factor that might have played a role in mitigating the extent of the price increase.