Oil prices continued an upward trend after talks collapsed among ministers from OPEC+ — consisting of the Organisation of the Petroleum Exporting Countries (OPEC) and allies.
In early Tuesday trading, crude prices surged to multi-year highs with the U.S. crude hitting its highest since 2014 after OPEC+ producers fell out over plans to raise supply in the face of rising global demand.
Brent crude climbed 62 cents, to $77.78 a barrel — highest since October 2018.
U.S. West Texas Intermediate (WTI) crude futures traded up $1.75, at $76.91 — highest since November 2014.
This development comes about two weeks after the commodity hit the $75 mark — its highest level since April 2019.
In 2020, the group had agreed on production cut to cope with the price crash caused by COVID-19 pandemic.
On Friday, a planned meeting by OPEC+ ministers to lift output by about 2 million barrels per day (bpd) from August to December 2021 was called off as the United Arab Emirates (UAE) criticised a proposed eight-month extension to output restraints.
The OPEC+ talks were abandoned with no new date fixed for the meeting.
The rise in crude oil price will result in increased revenue for Nigeria which depends largely on earnings from oil to finance its budget.
The N13.588 trillion 2021 budget signed into law by President Muhammadu Buhari on December 31, 2020, has a benchmark oil price of $40 per barrel.
Goldman Sachs, a US investment bank and financial services company, had earlier projected that oil prices will rebound to $75 by the third quarter of 2021.
A joint committee of ministers from Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries had also projected an increase in global crude oil demand by second half (H2) 2021.