Crude Oil prices on Thursday continued its steady spike by trading at $74.35, marking the highest traded price since 2014. This development followed inventories decline in the United States of America, even as Saudi Arabia (a major oil exporter) is seeking higher prices for the commodity.
On Thursday, the Organisation of Petroleum Exporting Countries (OPEC) had pumped high volumes of crude into the market in its bid to defend market share. The $74.35 price, therefore, marked an 87 cents increase from the last traded price.
Oil prices continued to climb on Thursday as a decline in U.S. crude inventories and commentary from Saudi Arabia that it will be happy to see crude rise to $80 or even $100 helped boost prices,
Meanwhile, OPEC member states are scheduled to meet today and later on the 22nd of April in Jeddah, Saudi Arabia to deliberate as well as review its crude production policy.
Prices are expected to continually increase as supplies decline
According to Reuters, OPEC has since 2017 implemented a policy that ensured reduced crude output in a bid to “draw down a global supply overhang that had depressed crude prices between 2014 and 2016.” Apparently, said policy worked, leading to the tightening of the crude market which consequently has led to the increase in global crude oil prices.
This trend is expected to continue in coming days, as the United States is gearing up to impose more economic sanctions Iran and Russia (over their meddlings in Syria), which will see a ban on crude exportation from those two countries.
Meanwhile in Nigeria…
The rising crude prices have so far been very beneficial to the country. The Nigerian economy is largely dependent on crude oil. Any increase in the price of the commodity, therefore, presents a lot of benefits.
The country’s foreign reserves have continually increased and are expected to hit $50 billion before the end of 2018. As a result of this, foreign exchange has equally improved considerably and is expected to continue this pattern.
As we noted earlier, Foreign Portfolio Investors (FPI) will be willing to come in and remain in the country so long as foreign reserves remain on the high side. These [FPIs] are key players in any economy, especially developing economies such as Nigeria.