Crude oil price rises to $34.65/barrel

Jude Egbas 16:59 - 20 May 2020

Governor Nyesom Wike and Babatunde Raji Fashola. [Twitter@NyesomWike]

Brent Crude and West Texas Intermediate are closing the week on a high.

The price of crude oil in the global market is rising gradually, as more countries and cities reopen their economies after coronavirus induced lockdowns.

U.S. West Texas Intermediate (WTI) crude settled up 68 cents a barrel, or 2.1%, at $32.50 a barrel. The July contract, trading at vastly higher volumes, settled up 31 cents at $31.96 a barrel.

Brent crude, which is the benchmark for Nigeria’s oil, has settled at $34.65 a barrel, down 16 cents or 0.5%.

Oil prices have risen in the past three weeks as COVID-19 restrictions are eased and more people return to work.

High production costs are hobbling Nigeria and its oil producers as global crude prices have tumbled

Offshore oil production in Nigeria (AFP)

It also helps that the global demand for crude is rising as a result.

The gradual spike contrasts with the bleakness of April when U.S. oil traded for as low as minus $37.63/barrel and Nigeria’s oil traded for $26/barrel.

By April 20, oil producers were practically paying buyers to take the commodity off them because there was nowhere to store the excess oil that was being pumped.

President Muhammadu Buhari. [Twitter/@BashirAhmaad]

President Muhammadu Buhari of Nigeria leads the hand-washing campaign as COVID-19 sweeps the country [Twitter/@BashirAhmaad]

The gradual rise in the price of crude oil will be good news for Nigeria, Africa’s biggest oil producer and most populous nation.

Nigeria has pegged its 2020 budget on an oil benchmark of $57/barrel. The collapse in the price of the product has led to slashing of salaries and salary delays across states.

Some state governors have also announced pay cuts for themselves and their political appointees as the nation's economy tanks.