The
President Muhammadu Buhari-led administration has been handed a new
life-line as the price of crude oil which is the mainstay of Nigeria's
local economy soars high.
Brent crude closed at a 27-month high yesterday over comments from
Saudi Arabia that signaled the likely extension of a supply cut deal by
OPEC and non OPEC members as data released by the World Bank projected
growth in oil prices by 2018.
Brent futures LCOc1 gained 86 cents or 1.64 percent to settle at $60.01 a barrel, its highest close since July 2015.
U.S. West Texas Intermediate crude CLc1, meanwhile, rose 46 cents
or 2.05 percent to settle at a more than six-month high of $53.54, its
highest close since April.
With yesterday’s gains, Brent futures were up for four days in a
row following comments earlier in the week from Saudi Arabia that the
Kingdom was determined to end a global supply glut that has weighed on
prices for more than three years.
“We are committed to work with all producers, OPEC and non-OPEC
countries ... We will support anything to stabilise the oil demand and
supply,” Saudi Arabia’s Crown Prince Mohammad bin Salman told Reuters on
Thursday when asked whether the kingdom would support extending an
agreement to cut supplies until the end of 2018.
The Organization of Petroleum Exporting Countries (OPEC) plus
Russia and nine other producers have cut oil output by about 1.8 million
barrels per day (bpd) since January. The pact runs to March 2018, but
they are considering extending it.
This is coming just as the World Bank released its forecast that
oil prices would rise to $56a barrel in 2018 from $53 this year as a
result of steadily growing demand, agreed production cuts among oil
exporters and stabilizing U.S. shale oil production, while the surge in
metal prices is expected to level off next year.
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