The price of Brent crude surged on Wednesday to a near three-month high amid optimism among investors and oil traders that major oil producers will extend oil production cut, as global demand picks up.
Brent crude gained about 1.49%, at $40.18, 3.30 am Nigerian time – the highest level since March 6, having gained 3.3% on Tuesday.
A meeting by OPEC+ (a group comprising OPEC, Russia and other major oil producers) is expected to be held virtually on Thursday. The oil production cuts are currently due to run through May and June.
“As virus-related lockdown measures continue to be lifted, we expect that demand will gradually recover,” Capital Economics said in a note to Reuters, estimating that global oil consumption will fall to just under 92 million BPD on average in 2020.
“This compared with 100.2 million barrels per day consumed globally last year,” Capital Economics added before the COVID-19 pandemic disrupted global demand negatively.
(READ MORE: Brent Crude gains 23% WoW, as oil production cut kicks off)
Meanwhile, Adeagbo Adedayo Sadiq, Country Manager, Scope Markets Ltd, spoke to Nairametrics about why it’s time for Nigerians to consider investing in crude oil derivatives, as the macro fundamentals show a bullish momentum in the energy market. He said:
“Taking a closer look at Nigeria’s main commodity export, crude oil. Every day we need the energy to accomplish a lot of tasks from manufacturing down to the food we eat.
“Investing in this energy that is involved in our daily activity is very lucrative.
“As we can see that a lot of events like US/Iran face-off and COVID-19 Pandemic had an impact on the price of crude oil in the first two quarters of the year 2020.
“The oil price benchmark fell to its lowest ever in history as of March 8th, 2020, losing about 90% of its market value for the year 2020. This piece of information is very useful as an investor or to anyone who intends to trade crude oil.
“Currently the price of crude oil has risen to more than 40%. This means that if you had invested in this crude oil futures as when the price was low your investment would have appreciated at that level of gain.
“With additional production cuts announced by OPEC alongside Russia/Saudi price deal, we tend to see further upside in the price of crude oil.
“So while crude oil is appreciating in value at this period, it’s time for anyone who wishes to invest in energy trading to act now.”
Now that we have brent at $40.18pb and d clear indication that d economy is picking up due to easing of d lockdown due to covid -19 pandemic,what’s going to happen to exchange rate that CBN took from #305 to #360 at CBN rate making parallel market to be #445.life becoming unbearable for d populace.