Oil prices reached their highest levels of the year as prospects of tightening supply outweighed worries about sluggish global growth and rising U.S. stocks.

US crude futures edged up by 1.3% higher at $89.69 per barrel, meanwhile Brent Crude added 1.3% to $93.06 per barrel.

Due to Saudi Arabia and Russia's announcement that they will prolong their voluntary output cutbacks until the end of the year, both contracts are expected to post substantial increases this week, building on the spike from the previous week.

According to the International Energy Agency's monthly report, which was released on Wednesday, the decision by these two significant producers to restrict supplies will cause a market deficit through the fourth quarter.

The Organization of Petroleum Exporting Countries also stated in its monthly reports released earlier this week that the likelihood of tighter markets will likely support prices in the upcoming months.

This upbeat outlook has assisted markets in putting to rest worries that rising interest rates in the U.S. could negatively affect economic activity in the greatest energy user in the world.