News Desk
Latest data from Oil Price indicated that Brent crude oil was priced at $91 per barrel on Tuesday, sustaining its increase over the past few days after which it reaching a 10-month high of $90 per barrel precisely a week ago.
The Tuesday’s surge in prices of Brent crude oil is the highest recorded since 2014, and it can be partly linked to Saudi Arabia’s announcement of its intention to sustain its voluntary production cuts of one million barrels per day until the end of 2023 as well as Russia’s declaration to extend its export cuts of 300,000 barrels per day until the year ends.
A news report from Reuters indicated that traders were closely monitoring the release of the August United States consumer price index data scheduled for Wednesday.
According to the report, the release of the data has the potential to significantly influence the direction of interest rates in the world’s largest economy, which is also the largest consumer of oil.
A markets analyst at CMC, Tina Teng, was quoted as saying that the CPI data by the US has the potential in shaping future economic and oil market trends.
Earlier on Monday, the Chief OPEC Correspondent Amena Bakr, noted that although Brent crude was trading above $90 per barrel, producer nations are not targeting $100 per barrel because it would only slow down oil demand.
This is even as the Executive Director of the International Energy Agency (IEA), Fatih Birol, in an article in the Financial Times, pointed out that despite the recurring discussions regarding the concept of reaching peak oil and peak coal in past years, both of these energy sources were currently experiencing record-high levels of production.
This trend contradicts any suggestions that these energy resources might be on the verge of decline in the near future.
Meanwhile, analysts believe that sustained uptick in Brent crude oil price may lead to higher price of fuel pump prices in Nigeria as marketers are bound to be procuring and importing petroleum products into the country at higher costs.
They hinged their forecast on the current supply constraints in the domestic market as well as stemming from Saudi Arabia and Russia’s declaration to cut supplies to the global market.
However, the positive implications of the current surge in Brent crude oil price are that Nigeria would earn more from crude oil exports and by implication, use the gains to alleviate the hardships triggered by the fuel subsidy removal and Naira exchange rates unification policy through sundry interventions.
Techrectory
