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Oil prices hit 2-year high as OPEC+ agrees to production cuts

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Oil prices at the international market rose to the highest level in more than two years on Tuesday.

This is coming on the heels of the agreement by major producers to cut down on production levels.

Brent crude futures, an international oil benchmark which Nigeria trade, hit $71.11 a barrel, up by 2%, while West Texas Intermediate oil futures stood at $68.59 after the meeting.

This is the first since April 2019 that the oil price will trade above $70 per barrel.

Rising from its online meeting on Tuesday, OPEC and its oil-producing allies, known as OPEC+, agreed to continue to boost output in July, in line with the group’s April decision to return 2.1 million barrels per day to the market between May and July.

Abdulaziz bin Salman, Saudi Energy Minister, expressed optimism over a good recovery in demand in the United States and China.

The group are expected to meet again in July to discuss production policy.

The resurgence in the price of crude oil is a piece of good news for Nigeria economy that is in need of foreign currency receipts to fund the 2021 budget.

However, this could translate to a harder time for local consumers of refine oil in Nigeria as the landing cost of imported refined petrol will automatically shoot up.

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