The President Muhammadu Buhari-led administration has been handed a new life-line as the price of crude oil which is the mainstay of Nigeria's local economy soars high.
Brent crude closed at a 27-month high yesterday over comments from Saudi Arabia that signaled the likely extension of a supply cut deal by OPEC and non OPEC members as data released by the World Bank projected growth in oil prices by 2018.
Brent futures LCOc1 gained 86 cents or 1.64 percent to settle at $60.01 a barrel, its highest close since July 2015.
U.S. West Texas Intermediate crude CLc1, meanwhile, rose 46 cents or 2.05 percent to settle at a more than six-month high of $53.54, its highest close since April.
With yesterday’s gains, Brent futures were up for four days in a row following comments earlier in the week from Saudi Arabia that the Kingdom was determined to end a global supply glut that has weighed on prices for more than three years.
“We are committed to work with all producers, OPEC and non-OPEC countries ... We will support anything to stabilise the oil demand and supply,” Saudi Arabia’s Crown Prince Mohammad bin Salman told Reuters on Thursday when asked whether the kingdom would support extending an agreement to cut supplies until the end of 2018.
The Organization of Petroleum Exporting Countries (OPEC) plus Russia and nine other producers have cut oil output by about 1.8 million barrels per day (bpd) since January. The pact runs to March 2018, but they are considering extending it.
This is coming just as the World Bank released its forecast that oil prices would rise to $56a barrel in 2018 from $53 this year as a result of steadily growing demand, agreed production cuts among oil exporters and stabilizing U.S. shale oil production, while the surge in metal prices is expected to level off next year.