Oil prices trade for $67.23 per barrel, hit highest in 11-months

Agency Report

Oil prices on Thursday rose for a fourth straight session to hit $67.23 per barrel, the highest levels in more than 11 months.

This was underpinned by monetary easing policies and lower crude production in the United States.

While this signaled a surge in revenue for Nigeria, it indicated a higher price for petroleum products in the country for the month of March.

The country depends largely on proceeds from crude oil to service over 80 per cent of its budget pegged at $45 per barrel price in the 2021 budget.

Brent crude futures for April gained 19 cents, 0.3 per cent, to $67.23 a barrel by 0400 GMT, while U.S. West Texas Intermediate crude for April was at $63.30 a barrel, up 8 cents, 0.1 per cent.

Both contracts touched their highest since January earlier in the session with Brent at $67.44 and WTI at $63.67.

An assurance from the U.S. Federal Reserve that interest rates would stay low for a while boosted investors’ risk appetite and global financial markets.

“Comments from Fed Chairman, Jerome Powell, earlier in the week relating to the need for monetary policy to remain accommodative have probably helped, but sentiment in the oil market has also become more bullish, with expectations for a tightening oil balance,” ING analysts said in a note.

A rare winter storm in Texas has caused U.S. crude production to drop by more than 10 per cent, or 1 million barrels per day (bpd) last week, the Energy Information Administration said.

Fuel supplies in the world’s largest oil consumer could also tighten as its refinery crude inputs had dropped to the lowest since September 2008.

The Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, is due to meet on March 4.

The group will discuss a modest easing of oil supply curbs from April given a recovery in prices, OPEC+ sources said, although some suggest holding steady for now given the risk of new setbacks in the battle against the pandemic.

Extra voluntary cuts by Saudi Arabia in Feb and Mar have tightened global supplies and supported prices.