The international oil benchmark, Brent crude, soared above the $50 per barrel mark on Thursday for the first time since early March, buoyed by hopes of a faster demand recovery as countries start to roll out COVID-19 vaccines.
Brent, against which Nigeria’s oil priced, rose by more than four per cent to $50.58 per barrel as of 7:08 pm Nigerian time on Thursday. The last time the oil price was above $50 was on March 5, 2020.
While the upturn in crude oil prices is expected to translate to increased revenue from oil exports for the Nigerian government, it would also push up the landing cost of fuel imported into the country.
Brent, the international oil benchmark, has risen by more than 19 per cent since November 13 when the pump price of petrol was adjusted upwards in the country.
Oil prices have recovered from historic lows reached in April when the COVID-19 pandemic hammered demand, helped by a record supply-cut deal by the Organisation of the Petroleum Exporting Countries and allies, known as OPEC+.
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OPEC+ will further ease its supply restrictions in January by adding an extra 500,000 barrels per day, although the easing is more gradual than previously agreed to provide additional support to the market.
Oil gained even after Wednesday’s weekly report on United States’ oil inventories showed a massive 15.2 million-barrel rise in crude stocks. Analysts had expected a 1.4 million-barrel drop, according to Reuters.
Britain began vaccinations this week and the United States could start inoculations as soon as this weekend. Concern over an attack on an Iraqi oilfield also lent support.
