By Adedapo Adesanya
As the oil market continues its recovery amid drop in demand recently, Nigeria’s oil futures, Brass River and Qua Iboe, recorded gains on Wednesday.
Brass River, a sweet medium light crude, gained 99 cents equivalent to 1.68 percent to trade at $59.87 per barrel, while the Qua Iboe, a light sweet crude grade, also gained 99 cents or 1.68 percent to trade at $59.87 per barrel.
Both crude futures had previously faced declines as a result of the coronavirus disease, affecting demand, they but took a different turn yesterday. This was largely because data showed new coronavirus cases in China fell for a second straight day as against previous days.
The Chinese government has continued to take huge measures to stimulate its economy and counteract the financial impact of the virus spread.
With this, market investors saw a potential rise for demand coming soon and prices went up, meaning there is a possible chance that China, which has imposed city lockdowns and travel restrictions to contain the virus that has now killed more than 2,000 people, may soon lift some if not all of its restrictions.
At the market yesterday, the International benchmark, Brent crude, rose 2.10 percent or $1.21 to trade at $58.72 per barrel, while US West Texas Intermediate (WTI) crude also rose by 0.4 percent or 36 cents to $53.68 per barrel.
The market may continue its expansion as China may reportedly cut its benchmark lending rate on Thursday as it attempts to limit the damage from affected business and travel bans, something investors will leverage.
Also, supporting prices on Wednesday was the decision taken by the United States to blacklist a trading subsidiary of Russia’s company Rosneft, which President Donald Trump’s administration said provided a financial lifeline to Venezuela’s government.
Venezuela is already under severe US sanctions as the Trump administration continues its campaign to remove President Nicolas Maduro from power.
Adding to the rally was the conflict in oil producing Libya, as its United Nations-recognized government withdrew from peace talks in Geneva after an attack by rebel forces led by Military commander, Khalifa Haftar, who wants to seize control of the country.
Oil production has always been affected in the oil-rich region and with continued conflict, lesser supply will mean price rises.
