Crude oil price rises to $87 per barrel — highest since October 2023

Crude oil prices, on Monday, increased to a five-month high.

Brent crude increased by 0.56 percent to $87.54 a barrel while US West Texas Intermediate (WTI) crude rose 0.79 percent, to $83.83 percent, at 20.00 WAT.

Consequently, the development puts both crude benchmarks on track for their highest closes since October 27, 2023.

This is above the $77.96 per barrel the federal government benchmarked as oil price in the 2024 budget.

It is also higher than the $65 per barrel used by the Nigerian National Petroleum Company (NNPC) Limited to calculate the allocated (90,000 barrels) crude in the $3.3 billion crude-for-cash loan agreement with African Export-Import Bank (Afreximbank).

NNPC, in a statement on January 21, had said if “oil prices rise, more money will come in from selling the 90,000 barrels, allowing for faster repayment. However, if oil prices fall, the repayment may be slower”.

“The quantity of crude earmarked (90,000 barrels) is sized to ensure enough cash is available for the repayment of the facility when it is due,” NNPC said.

“This also ensures that NNPC Limited can meet other cash flow obligations, considering the expected future price of crude oil globally.”

NNPC said oil prices are highly unpredictable, meaning prices can fluctuate within any given period.

Meanwhile, the Organisation of Petroleum Exporting Countries (OPEC), on March 13, said Nigeria’s average daily crude oil production dropped to 1.32 million barrels per day (bpd) in February.

However, OPEC’s secondary sources put Nigeria’s crude production at 1.476 million bpd — a 3.29 percent uptick from the 1.429 million bpd reported by the oil cartel in January this year.