By Adedapo Adesanya
Prices of oil pointed upward on Friday, continuing from gains made in the previous session after progress was made in the talks between the United States and China to end their trade war.
This spell good news for Nigeria as its oil benchmark, Brent crude futures traded $60.66 per barrel, up $1.56 or 2.64 percent, while the US West Texas Intermediate (WTI) crude futures rose $1.32, rising by 2.4 percent to trade at $54.87 per barrel.
The United States and China reached a partial agreement on Friday that may lead to a truce in the trade war and under this arrangement, China would agree to some agricultural concessions, while the United States would provide some tariff relief.
The US-China trade dispute has “cast a shadow” over oil demand and a failure to reach a deal would be “catastrophic” for the global market, Secretary-General of OPEC, Mr Mohammad Barkindo said.
On Thursday, the OPEC’s chief hinted at a deeper cut in the December meeting which will on December 6 see both OPEC and non-OPEC members meet to decide further course of action.
In January, OPEC+ implemented a production cut of 1.2 million barrels per day (MMbpd) and experts believe that if OPEC + cuts production by another 0.5 million barrels per day (MMbpd), it could help tighten the oil market.
Oil prices also rose sharply on Friday after Iranian state media said that two rockets had struck an Iranian tanker traveling through the Red Sea.
As a result, Business Post monitored that Brent crude futures then went up 2.4 percent with West Texas Intermediate (WTI) futures settling 2.2 percent higher.
Iran’s foreign ministry through its spokesman Abbas Mousavi later confirmed that the tanker was hit twice, according to state TV.
“Those behind the attack are responsible for the consequences of this dangerous adventure, including the dangerous environmental pollution caused,” he said.
The incident comes amid heightened tensions in the region as attacks in Saudi Arabia on September 14 hit two of its largest production facilities, forcing the country to temporarily shut down roughly half of its output, or more than 5 percent of the world’s daily crude production.
This resulted in the international benchmark Brent crude rising as much as 20 percent to $71.95 per barrel, the highest jump on record.
While Yemen’s Houthi rebels, who have been at war with the Kingdom of Saudi Arabia since 2015 claimed the attack, Saudi Arabia and numerous officials and analysts pointed to Iran as the culprit.
Friday’s incident could push tensions between Iran and the US even higher, more than a year after President Donald Trump withdrew America from the nuclear deal and imposed sanctions which are now affecting Iran’s economy.
Dipo Olowookere