Nigeria to Earn More as Crude Oil Rises 2% to $93 Per Barrel

By Adedapo Adesanya

The prospect of Nigeria earning more from crude oil sales rose on Friday after the price of Brent appreciated by $2.16 or 2.37 per cent to $93.27 per barrel.

This came amidst the Russia-Ukraine crisis and a deep freeze in Texas that disrupted some oil production in the United States.

It was the highest level the oil grade has reached since 2014, while the price of the West Texas Intermediate (WTI) crude oil futures rose by $2.04 or 2.26 per cent to $92.31 per barrel.

Recently, supply shortage and political tensions in Eastern Europe and the Middle East have been bullish for black gold, supported by freezing weather in the US, which has spread from the Midwest south to Texas.

This disrupted operations at some Permian oil wells, as icy roads have prevented some trucking operations crucial for oil production.

Due to the winter weather, a large producer in the Permian had to shut in 4,000 barrels per day of its crude production which has also affected some wells in the largest US shale play.

In addition to supply disruptions in Texas, oil prices were supported on Friday by the tension between the US and Russia over Ukraine.

The  US State Department said it has information that Russia is planning to stage fabricated attacks by Ukrainian military or intelligence forces as a pretext for a further invasion of Ukraine.

This has heightened concerns over oil supplies that are already tight.

The Organisation of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+, agreed this week to stick to moderate output increases of 400,000 barrels per day.

This is happening when the group is already struggling to meet existing targets and despite pressure from top consumers to raise production more quickly.

Iraq, OPEC’s second-largest oil producer, pumped well below its OPEC+ quota in January joining others like Nigeria and Angola.

OPEC+ member Kazakhstan, meanwhile, wants more of its oil output to stay at home to tackle rising fuel prices.

While there are expectations from some quarters that the market will fall into surplus to help halt rising prices, others see prices hitting $100 per barrel.