The price of Brent crude rose to the highest in two months amid supply constraints and a drop in crude inventories of the United States, the world’s top oil consumer.
Brent crude oil futures, global oil benchmark, climbed 0.26 percent to $77.55 a barrel by 10:15 am on Friday.
Checks by TheCable showed that this is the highest trading price since July 5, when the global oil benchmark traded $77.16 a barrel.
U.S. West Texas Intermediate (WTI) crude oil futures also witnessed a corresponding increase of 0.11 percent to $73.38 a barrel.
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Analysts at UBS told Reuters that Brent oil price could hit $80 a barrel by the end of September due to stock draws, lower OPEC production and stronger demand in the Middle East.
“What still might allow Brent to hit that mark over the coming weeks is the ongoing drop in oil inventories driven by unplanned supply disruptions,” the analysts said.
Market analysts added that surging natural gas prices were also attracting the rise as the supply shortage of gas could encourage power utilities to shift from gas to oil if winter turns out to be colder this year.
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The rise in crude oil price means an increase in revenue for Nigeria but a headache for the country’s subsidy shortfall payments.
Recently, Mele Kyari, group managing director of the Nigerian National Petroleum Corporation (NNPC), said the supply crisis affecting the natural gas market might push crude oil prices up by $10 a barrel.
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