Nigerians set to smile as oil prices rise drastically
- Oil prices rise to $58 for the time since 2015
- This was following a deal between OPEC and other producers
Oil prices rise as OPEC cuts an output deal
Some good news has come for Nigerians as oil prices have increased to the highest level since early 2015.
This occurred after a meeting between Organization of Petroleum Exporting Countries (OPEC), and other producers over the weekend in Vienna.
Currently, the Brent sweet crude futures, which is the international benchmark for oil prices, soared to 57.89 dollars per barrel in overnight trading between Sunday, Decmber 11, and Monday, December 12.
This is the first output cut deal since 2001, all parties agreed to jointly reduce output in order to rein in oversupply and prop up the market.
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The Australia and New Zealand Banking Group Limited, commonly called ANZ bank said: "The Saudi Aramco, Saudi Arabia’s state-controlled oil company, has informed customers that their allocations would be reduced in January 2017, in line with the recent OPEC production cut agreement.”
On its own, OPEC has said it will slash output by 1.2 million barrels per day from Jan. 1, with top exporter Saudi Arabia cutting around 486,000 bpd in a bid to end overproduction .
On Saturday, December 10, producers from outside the 13- country OPEC group agreed to reduce output by 558,000 bpd, short of the initial target of 600,000 bpd.
This rise started way back in August, crude oil prices took a dramatic turn, with a three percent increase on August 8.
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This was because, according to the president of OPEC Mohammad Al-Sada, “higher oil demand is expected in the third and fourth quarters”, leading to higher prices.
After his declaration, Brent crude, the international benchmark for oil, surged from $42 to $45.33 a barrel – nearly a three percent increase.
Below is a video analyzing the reasons for the rise: