Oil prices, on Tuesday, rose more than two percent, their highest in 12 months after major crude producers showed they were reining in output roughly in line with commitments.
Reuters reports that Brent crude, against which Nigeria’s oil is priced, was up $1.27, or 2.3 per cent, at $57.62 a barrel by 1320 GMT, its third straight day of gains and the highest levels since late February last year.
The United States benchmark, West Texas Intermediate, gained $1.2, or 2.2 percent, to $54.75, a level last seen in early March 2020.
Reuters Survey discovered that crude output from the Organisation of the Petroleum Exporting Countries rose in January for a seventh month but the increase was smaller than expected.
Also, voluntary cuts of one million barrels per day by OPEC’s de facto leader, Saudi Arabia, are set to be implemented from the beginning of February through March.
“With OPEC and its allies (OPEC+) endeavouring to keep global oil production below demand, we expect petroleum inventories to keep falling,” UBS said in a note.
“With inventories starting to drop in 2H20, the structure of the futures curve has shifted to become downward sloped. This is attracting investors.”
The investment bank forecast Brent would reach $63 per barrel by the second half of this year and $65 by the first quarter of 2022.
Goldman Sacks said it expected the benchmark to reach $65 a barrel by July.