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.