Oil prices hit two-year high amid supply cuts

Oil prices are on a two-year high with Brent crude peaking at $60.80 down from $60.91 per barrel on Tuesday.

Nigeria’s budget benchmark for 2017 is $44.50 per barrel.

Reuters reports that benchmark Brent LCOc1 was down 10 cents at $60.80 per barrel by 1050 GMT, not far off July 2015-highs reached earlier this week, and up around 37 percent since their 2017 lows last June.

Positive sentiments have followed price stability, owing to a November 2016 consensus reached by Organisation of the Petroleum Exporting Countries (OPEC), Russia and other exporters to withhold about 1.8 million barrels per day (bpd) in oil production to enforce supply cuts.

The agreement runs to March 2018, with calls for extension from Russia and Saudi Arabia.

Meanwhile, the US is recording high profits on crude exports as a result of increased production.

U.S. Energy Information Administration (EIA) data showed crude oil exports hit a record-high of 1.98 million bpd in the week preceding September 29.

EIA’s forecast for Brent crude oil spot prices average $51 per barrel in 2017 and $52 per barrel in 2018.

The forecast for average West Texas Intermediate (WTI) price relative to Brent crude was $48 per barrel in October, showing a $2 per barrel differential in 2017 and 2018.

In 2018, crude oil production is forecast to rise to an average of 9.9 million bpd.

If achieved, 2018 production would be the highest annual average on record, surpassing the previous record of 9.6 million bpd set in 1970.