Oil Prices Goes Up

Oil prices rose on Monday, lifted by a drop in U.S. drilling activity as well as by expectations that the United States could re-introduce sanctions against Iran.

U.S. WTI crude futures were at $65.18 a barrel at 0025 GMT, up 24 cents, or 0.4 per cent, from their previous settlement.

Brent crude futures were fetching $69.67 per barrel, up 33 cents, or 0.5 per cent.

Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore, said oil markets remained nervous about “whether or not the U.S. administration will scrap or maintain the fragile nuclear deal with Iran.”

Innes said prices were also supported by a weekly report that there was a drop in activity of drilling for new oil production in the United States.

U.S. drillers cut seven oil rigs in the week to March 29, bringing the total count down to 797 RIG-OL-USA-BHI, General Electric Co’s Baker Hughes energy services firm said in its closely followed report last Thursday.

It was the first time in three weeks that the rig-count fell.

Baker Hughes published its North American rig count report on Thursday, one day earlier than usual, due to the Good Friday holiday on March 30.

Oil prices have generally been supported by supply restraint led by the Organisation of the Petroleum Exporting Countries (OPEC) and Russia, which started in 2017 in order to rein in oversupply and prop up prices.

Liquidity on Monday will be low as many countries, especially in Europe, will still be on Easter holiday. ($1 = 6.2726 Chinese yuan renminbi)

(Reuters/NAN)

Crude Oil Hits It Highest At $64 Per Barrel Since Mid-2015

The Global oil benchmark, Brent crude, and has hit a 28-month high since President Muhammadu Buhari came to power in mid-2015.

Brent, on which Nigeria’s crude oil is priced, rose by $2 to $64.07 per barrel as of 8:03 pm Nigerian time on Monday, more than $19 higher than the country’s oil price benchmark of $44.5 per barrel for this year’s budget.

The Excess Crude Account, into which the country saves the difference between the market price of oil and the budget benchmark to provide a cushion when oil prices fall or extra cash is needed for spending on infrastructure, has suffered declines since oil price slumped in 2014.

The account, which stood at about $4.11bn in October 2014, dropped to about $3.11bn in November and $2.45bn in December that year and declined further into 2015.

The balance in the ECA stood at $2.309bn as of September 27, 2017, according to the Ministry of Finance, while the nation’s external reserves rose to $33.93bn as of November 3, 2017, latest data from the Central Bank of Nigeria showed on Monday.

“The price rise is a reaction to the uncertainty from Saudi Arabia,” the Chief Executive Officer, Sun Global Investments, Mihir Kapadi, told news reporters.

Other factors have edged the oil price upwards. Saudi Arabia, Russia, Kazakhstan and Uzbekistan met over the weekend and said they were willing to maintain restrictions on oil production, to address a glut in supply and prop up prices.

The United Arab Emirates and Iraq have also said they would back an extension to production curbs, which were due to end in March 2018.

Meanwhile, Nigeria has expressed support for an extension of a deal between the Organisation of Petroleum Exporting Countries, Russia and other non-members to cut oil supply until the end of 2018, “as long as the right terms are on the table” regarding its own participation.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said there was growing agreement among other members of OPEC to extend the deal.

“There isn’t any reason to change what is a winning formula,” he told reporters, adding, “There is a consensus to extend. The issue will be the duration.”

Nigeria itself, however, is exempt from the deal.

OPEC, along with Russia and nine other producers agreed to cut oil output by about 1.8 million barrels per day until March 2018 in an attempt to ease a global excess that weighed on prices.