Brent crude price hits $70 a barrel, hope rising for Nigeria

Oil rose nearly 1% on Wednesday, supported by a decision by OPEC and its allies to stick to its plan to gradually restore supply, along with the slow pace of nuclear talks between Iran and the United States. Brent rose 64 cents, or 0.9%, to $70.89 a barrel. Brent hit its highest since March during Tuesday’s session. This is a cheering news for Nigeria cash strapped economy. If the price continue on the upward swing, it will boost Nigeria revenue and shore up the value of the Naira.

U.S. West Texas Intermediate (WTI) crude rose 60 cents, or 0.9%, to $68.32 a barrel. “The oil market welcomed the OPEC+ decision to stick with its existing production plan, and in conjunction with positive global demand indications, prices are gaining further today,” said Louise Dickson, Rystad Energy oil markets analyst.

Expecting a recovery in demand, the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, agreed on Tuesday to maintain their plan to gradually ease supply curbs through July. The OPEC+ meeting took only 20 minutes, shortest in the group’s history, indicating unity among its members and their confidence in the market’s recovery, analysts said.

OPEC+ data shows the group is now more upbeat about the pace of rebalancing in the oil market than it was a month ago. Saudi Energy Minister Prince Abdulaziz bin Salman said solid demand recovery in the United States and China and the pace of COVID-19 vaccine rollouts can only lead to further rebalancing of the global oil market. “We expect oil prices to move well beyond $70 per barrel towards mid-year,” said Norbert Rucker, analyst at Swiss bank Julius Baer. Analysts also said the slow progress of Iran nuclear talks provides breathing room for demand to catch up before Iranian oil returns to the market.