The price of Brent crude oil, against which Nigeria’s crude oil is benchmarked, increased above $70 per barrel on Tuesday following the decision of the OPEC+ Joint Technical Committee to sustain its global oil demand forecast.
The 13-member group at an online meeting held on Tuesday expressed optimism over rising demand from the United States and Europe, assuring that improved supply from Iran will help them meet the impending growth in demand for crude oil.
Brent price increased by $1.38 to $70.70 per barrel as of 4.32pm Nigerian time on Tuesday while the United States West Texas Intermediate traded at $67.68, gaining $1.36.
“The market appears to be more focused on the positive demand story from the US and parts of Europe,” ING’s head of commodities strategy, Warren Patterson, and senior commodities strategist, Wenyu Yao, said in a note.
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“In the US, the summer driving season officially got underway following the Memorial Day weekend, and we have entered this period with gasoline inventories already trending lower, and not too far from a five-year low for this time of the year,” the ING analysts added.
In a communique issued at the end of the video conference, OPEC said, “The meeting noted the ongoing strengthening of market fundamentals, with oil demand showing clear signs of improvement and OECD (Organisation for Economic Co-operation and Development) stocks falling.
“This is as the economic recovery continued in most parts of the world as vaccination programmes accelerated.”