From Uche Usim Abuja
Soothing news came the way of Nigeria and other oil-reliant nations Friday evening as crude prices peaked at $49.25/barrel at the international market.
The new price, which indicates a boost in demand as nations get around the COVID-19 pandemic, is the highest level since March 5.
The latest price is coming a day after major producers agreed to ease their oil output cuts next year more gradually than previously planned — giving a fragile market more time to absorb the extra supply.
Brent crude, the international benchmark for Nigeria’s crude, gained a 1.13 percent increase, while the West Texas Intermediate (WTI), the United States crude benchmark, was up by 1.03 percent at $46.06.
Experts described the latest increase in crude oil price as
good news for Nigeria, crude oil sales accounts for a bulk of the government’s income and about 90 percent of Nigeria’s foreign exchange earnings.
With this development, the foreign exchange scarcity challenge will ease a bit, even as Nigeria struggles to recover from the scathing effects of the COVID-19 pestilence and a second recession.
The Organization of the Petroleum Exporting Countries plus (OPEC+), a group of non-OPEC countries which export crude oil, on Thursday agreed to ease oil-output cuts next year after almost a week of high negotiations that exposed a new rift at the heart of the cartel.
The group agreed to add 500,000 barrels a day of production to the market in January, and ministers will then hold monthly consultations to decide on the next steps.
That’s a much shorter time frame than OPEC+ usually operates under, and before this week the expectation had been that the group would hold off putting more oil onto the fragile market for another three months.