Oil surged to a five-week high on Monday after Saudi Arabia and Russia signalled an extension of the non-members of the Organisation of Petroleum Exporting Countries (OPEC+) output cuts and a United States (U.S.)-China agreement to restart trade talks improved the demand outlook. WTI oil for August delivery climbed $1.64 to $60.11 a barrel on the New York Mercantile Exchange in London. The contract added 9.3 per cent last month.
Brent for September rose $1.84, or 2.8 per cent, to $66.58 a barrel on the ICE Futures Europe Exchange. The August contract expired Friday. The benchmark global crude traded at a premium of $6.43 to WTI. Consistent rise in oil prices, analysts say, is good for the implementation Nigeria’s N8.91 trillion budget 2019. The country, a member of OPEC, relies on crude oil sale for foreign exchange (forex) to implement development projects. The budget was based on estimated crude production of 2.3 million barrels a day, oil price benchmark of $60 per barrel and an exchange rate of N305 to the dollar.
The Senate had increased the 2019 budget by N80 billion, up from the N8.83 trillion presented by President Muhammadu Buhari to lawmakers last year. Parliament said the 2019 budget was aimed at consolidating growth. It approved a budget deficit of N1.9 trillion, representing 1.37 per cent of GDP. Nigeria’s economy grew by 1.93 per cent last year, its fastest pace since a recession two years earlier, data showed, while inflation 11.40 per cent in May.
Other OPEC members have indicated their support for the agreement between Russian President Vladimir Putin and Saudi Crown Prince Mohammed Bin Salman to prolong the curbs by six to nine months as meetings on production policy start in Vienna. President Donald Trump and his Chinese counterpart Xi Jinping declared a truce to their trade war and the U.S. will hold off on imposing additional tariffs on China.
THE NATIONONLINE
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