Crude Oil prices rose to its highest level since March on Friday, this development comes one day after key producers of the commodity reached an agreement to ease their output cuts next year more gradually than had been planned, which extends the time for the market to absorb the glut.
The price of Brent crude, the international benchmark, shot up by 1.13 percent to $49.25 per barrel as at Friday, while the WTI crude rose by 1.03 percent to $46.06.
This development will see Nigeria’s earnings rise as the country depends heavily on crude sales for foreign exchange earnings.
The low crude oil prices at the international market caused by low demand since the COVID-19 pandemic hit has led to the scarcity of foreign exchange for the Nigerian government – a major source of foreign exchange for Nigerian businesses.
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The Organization of Petroleum Exporting Countries plus (OPEC+), a group of non-OPEC countries which export crude oil, yesterday agreed to ease oil-output cuts next year after almost a week of fraught negotiations that exposed a new rift at the heart of the cartel.
It was agreed that an additional 500,000 barrels per day will be supplied to the market in January, also, ministers are expected to meet on monthly basis to determine the next line of action.
That’s a much shorter time frame than OPEC+ usually operates under, and before this week the expectation had been that the group would hold off putting more oil onto the fragile market for another three months.
But the compromise deal avoided a breakdown of OPEC+ unity, which had become a growing risk after days of tense talks exposed a new split between core cartel members, the United Arab Emirates, and Saudi Arabia.
