The international oil price benchmark, Brent crude, rose to its highest level since March on Monday as major oil producers cut their output levels and countries eased lockdowns.
The Organisation of Petroleum Exporting Countries and its allies reached a deal in April to cut oil production by 9.7 million barrels per day in May and June in a bid to prop up the price of the commodity.
Brent, against which Nigeria’s oil is priced, increased by $2.88 to $35.38 per barrel as of 6:05pm Nigerian time on Monday.
OPEC said last Friday that the total effective global production adjustments could reach 20.1 million bpd, noting that some of its members, namely Kuwait, Saudi Arabia and the United Arab Emirates, had agreed on an additional 1.2 million bpd adjustment.
The Chief Market Analyst at Avatrade, Naeem Aslam, was quoted by Business Insider as saying that Monday was turning out to be a “remarkable day” for both Brent and the US benchmark, West Texas Intermediate.
He said, “The global economy is reopening and the oil glut has eased off.
“It is still unclear if the prices can continue their upward journey at the current pace, and especially if we have a valid reason for the crude price to top the $35.”
Energy Intelligence reported on Monday that OPEC might extend the cuts to the rest of the year, citing an unnamed OPEC delegate.