The
local economy in Nigeria is currently jeering towards recovery with
positive indications ranging from the movement away from recession,
increase in foreign reserve and value of greenback. Crude oil, Nigeria‘s biggest revenue earner yesterday hit $58 per
barrel, the highest price in 2017, surging the country’s excess crude
earnings by $22.1 million in one day.
The new price of Brent crude, which is $13.5 excess on each barrel
of over 1.8 million barrels produced in the country, also surged the
recovery hope for the country’s budget.
In the 2017 budget, the executive set the crude oil benchmark at
2.2 million barrels per day at a price of $42.5 per barrel, before the
National Assembly pushed the benchmark to $44.5 a barrel with hopes that
the black gold would remain at its January rate, which was above $50.
The price increase is an additional benefit to Nigeria, which just
secured the nod of the Organisation of Petroleum Exporting Countries
(OPEC) for the extension of its exemption from crude oil production cap
following the country’s plea to be exempted until it stabilises its
production.
The extension was at the meeting of the Joint Ministerial
Monitoring Committee of OPEC and Non-OPEC Countries, which ended in
Vienna on Friday, according to a statement issued by Director of Press
at the Ministry of Petroleum Resources, Mr. Idang Alibi.
Meanwhile, Brent crude oil hit a new 2017 high yesterday,
continuing a rally fuelled by improving demand and expectations that
producers will extend output cuts.
International benchmark Brent rose $1.60, or 2.8 per cent, to
$58.46 by 12:48 p.m. ET, having touched the highest level since July
2015.
U.S. West Texas Intermediate crude remained well below its 2017
high, but topped $51 a barrel for the first time in four months. It was
last trading up $1.10, or 2.2 per cent, at $51.76.
OPEC and other oil exporters declined on Friday to extend their
agreement to limit production in a bid to drain a global glut that has
weighed on prices for three years. However, some analysts believe it’s
only a matter of time before the cartel agrees to an extension.
“The market anticipates that OPEC and non-OPEC (exporters) are going to continue with their production cuts through 2018,” president of Lipow Oil Associates, Andy Lipow, said.
Following glut in the international crude oil market, OPEC had
required its members to cut down on their oil production quota in order
to stabilise prices in the international oil market.
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