The international oil benchmark, Brent Crude, has risen recently by more than two per cent on Tuesday for the first time in 12-months and hitting a 12-months high after all major crude oil producers showed they were reining in the output roughly in line with their commitments.
Brent crude, against which Nigeria’s oil is price against, was up $1.27, or 2.3 per cent, at $57.62 a barrel by 1320 GMT, its third straight day of gains and the highest levels since late February last year, according to Reuters.
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The United States benchmark, West Texas Intermediate, gained $1.2, or 2.2 per cent, to $54.75, a level was last seen in early March 2020. Crude production by the Organisation of the Petroleum Exporting Countries rose for a seventh month in January but the increase was smaller than expected, a Reuters survey found.
Also, voluntary cuts of one million barrels per day by OPEC’s de facto leader, Saudi Arabia, are set to be implemented from the beginning of February through March.
“With OPEC and its allies (OPEC+) endeavouring to keep global oil production below demand, we expect petroleum inventories to keep falling,” UBS said in a note.
“With inventories starting to drop in 2H20, the structure of the futures curve has shifted to become downward sloped. This is attracting investors.”
The investment bank forecast Brent would reach $63 per barrel by the second half of this year and $65 by the first quarter of 2022. Goldman Sachs said it expected the benchmark to reach $65 a barrel by July.
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