Hope For Nigeria As Oil Prices Rise, Inches Closer To $53
Nigeria may soon bid farewell to a hard-biting economic recession. And that is a very big MAY.
As you may recall, it was the crash in global oil price from $100 to $40 per barrel that triggered the skin biting downturn.
But there is hope for full economic recovery as oil prices rose on Tuesday, lifted by indications that supply is gradually tightening, especially in the United States.
This is some short term good news because crude oil is the mainstay of Nigeria’s revenue.
According to Reuters’ reports, brent crude oil was up 40 cents at 52.06 dollars a barrel this morning while the United States light crude was 35 cents higher at 47.72 dollars.
“U.S. crude oil stocks have been falling consistently in recent weeks,” said Fawad Razaqzada, market analyst at futures brokerage, Forex.com.
“If the downtrend in oil inventories is maintained, then a bullish case can be made for oil, especially given the ongoing supply restrictions from OPEC and Russia,” Razaqzada said.
U.S. commercial crude inventories have fallen by almost 13% from their March peaks, to 466.5 million barrels.
U.S. crude production has broken through 9.5 million barrels per day (bpd), its highest since July 2015, but analysts say growth may slow as U.S. energy firms cut the number of rigs drilling for new oil.
The Organisation of the Petroleum Exporting Countries, OPEC and non-OPEC producers including Russia have also pledged to hold back around 1.8 million bpd of output between January 2017 and March 2018 in order to tighten supplies and heighten prices.