Oil price hits $85 a barrel — first time in three years

Brent oil, the global benchmark, has crossed the $85 mark — the highest level since October 2018 — in what is a potential boost to Nigeria’s oil export revenue.

Brent crude futures traded as high as $85.07 a barrel on Friday morning.

US West Texas Intermediate (WTI) crude futures rose 0.85 percent to $82 a barrel.

Two weeks ago, Brent crude topped $80 per barrel.

The surge followed a rise in demand for energy that resulted from the decision of the Organisation of Petroleum Exporting Countries (OPEC) and its allies to maintain its gradual monthly oil production increase.

The crude oil market has continued to boom amidst surging gas prices, gradual global recovery from the COVID-19 pandemic and vaccine rollout.

The rise in crude oil price will result in increased revenue for Nigeria, but the country’s subsidy shortfall payments may erode the gains.

Nigeria, one of Africa’s top producers, is struggling to boost output to the quota set by the Organisation of Petroleum Exporting Countries (OPEC) to keep up with increasing global demand.

In September, Nigeria’s oil production increased marginally to an average of 1.25 million barrels per day from 1.24 million the previous month.

In June, Kyari had said rising crude oil prices will cause problems for resource-dependent countries such as Nigeria.

He lamented that oil prices had started exiting the comfort zone set by the NNPC and becoming a burden for the country.

President Muhammadu Buhari has budgeted $57 per barrel as the oil benchmark in the 2022 budget.