Oil prices rose to a year-high on Friday as supplies continue to fall amid signs of economic recovery in the United States.
Brent Crude oil, the global benchmark against which Nigerian oil is priced, rose by 45 cents or 0.8 percent to $59.56 per barrel at 11:01 am Nigerian time. Its highest since February 20, 2020.
U.S West Texas Intermediate (WTI) crude oil expanded by 51 cents or 0.9 percent to $56.73 a barrel.
Oil prices surged after reports showed stronger than expected orders for U.S. goods in the month of December, indicating a growing manufacturing sector that could fuel new job creation and consumption ahead of Joe Biden’s $1.9 trillion coronavirus aid plan.
“OPEC+ discipline has been a real positive,” said Michael McCarthy, chief market strategist at CMC Markets, referencing OPEC plus commitment to make deep supply cuts and further reduce global oil stockpiles.
“And then when we have signs of better economic growth, then it’s up and away (for prices),” said McCarthy.
Also, rising demand from China is aiding oil outlook as shown by industry tracking, two tankers of North Sea crude oil were seen heading to China for March 22 and March 24, stated Stephen Innes, Axi global market strategist.
“When demand drives commodity prices, it has a more bullish impact and leaves a more lasting reflection on price action,” Innes said in a note.
