For the first time in two years, the price of crude oil, Nigeria’s biggest revenue earner rose to $70.20 per barrel.
According to reports, the rise was last seen in May 2019 and investors’ are optimistic that improving oil demand and a dwindling supply glut may mean the market can absorb any additional supply from OPEC and its allies.
The new price regime, experts say, is beneficial to the country as it should receive the highest revenue on crude oil but also pay the biggest subsidy on imported refined products.
Similarly, Brent crude rose 1.3 per cent to $70.20 a barrel. West Texas Intermediate futures gained 2.2% to $67.78 a barrel.
The U.S. gauge crossed its highest level since October 2018 earlier on Tuesday.
Nigeria, Africa’s biggest crude oil exporter, depends largely on proceeds from crude oil to service over 80 per cent of its annual budget.
The country is an irony as it still occupies the top spot as the biggest importer of petroleum products in the continent due to the poor state of its refineries.
Members of the Organisation of the Petroleum Exporting Countries and their allies, a group known as OPEC+, on Tuesday, agreed to continue relaxing curbs on oil production, signalling their confidence in improving oil demand and a drop in the global supply glut.