Crude Oil Rose Above $43 Per Barrel on Improved Demand

Global oil prices surged on Wednesday as global demand for the commodity improved.

The Brent crude oil, against which Nigerian crude oil is priced, increased from $42.68 per barrel it traded on Tuesday to $43.48 per barrel on Wednesday during the New York trading session.

While the US West Texas Intermediate crude oil surged by 80 cents from $40 per barrel to $40.80 per barrel.

The surge in prices was after OPEC and allies, known as OPEC plus, announced on Wednesday that they would restore part of capped crude oil production back to the oil market next month.

“As we move to the next phase of the agreement, the extra supply resulting from the scheduled easing of production cuts will be consumed as demand continues on its recovery path,” Saudi Energy Minister Prince Abdulaziz bin Salman said at the start of an OPEC+ video conference on Wednesday. “Economies around the world are opening up, although this is a cautious and gradual process. The recovery signs are unmistakable.”

OPEC plus had capped production by 9.7 million barrels per day in April and later reduced it to 7.7 percent earlier this month as more economies reopened for operations.

However, while the number of new COVID-19 cases continues to surge in the United States, the world’s largest economy, OPEC plus said demand for its commodity has risen in recent weeks, hence, the need to increase oil production.