Oil prices have topped $80 per barrel for the first time since 2018.
Gatekeepers News reports that global oil benchmark, Brent crude on Tuesday, increased for the first time in three-year amid increasing demand for the commodity.
Brent crude surged 0.86 percent to $80.22 a barrel — the highest since October 2018.
Similarly, U.S. West Texas Intermediate (WTI) crude futures witnessed a corresponding increase of 1.05 percent to $76.24 a barrel.
Goldman Sachs on Monday raised its year-end forecast for Brent to $90 per barrel from $80.
Analysts said the surge in natural gas prices supported crude rally on expectations that spillover demand will benefit oil as users seek alternatives.
Commonwealth Bank Commodities Analyst, Vivek Dhar, told Reuters, “Oil demand could pick up by an additional 0.5 million barrels per day, or 0.5 per cent of global oil supply, as high gas prices force a switch from gas to oil consumption.”
Although the rise in crude oil price may mean more revenue for Nigeria the nation’s subsidy shortfall payments may destroy the opportunity.
Nigeria, one of Africa’s top producers, is currently struggling to boost output to the quota set by the Organisation of Petroleum Exporting Countries (OPEC) to keep up with rising global demand.
Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, earlier said that Nigeria’s underperformance in the last few months concerning the quota allocated by OPEC would come to end on or before mid-November.
Kyari said, “From everything we’re doing, we’ll get back to the OPEC level, probably, by the end of October and maximum middle of November. We’re not far from that.”
According to data from the Department of Petroleum Resources (DPR), Nigeria’s oil production dropped to an average of 1.23 million barrels per day in August, which is the lowest figure recorded so far in 2021.
