Brent crude futures were up 42 cents, or 0.6per cent, at $72.64 a barrel at the time of filling this report, having earlier touched $72.83 — highest since May 20, 2019.
U.S. West Texas Intermediate (WTI) crude futures climbed 35 cents, or 0.5percent, to $70.40 a barrel, after rising to as high as $70.62 — highest since October 17, 2018.
According to energy analyst, the widespread faith that oil demand growth would trend significantly higher in the second half of the year is paving the way forward for the price rally.
Crude oil prices had suffered a huge decline globally following the impact of the coronavirus pandemic.
The decline in oil prices affected several economies globally, particularly countries like Nigeria which depend largely on crude oil earnings.
Oil prices have, however, been on a tear on the back of gradual global recovery and vaccine roll out.
It still faces bumpy short-term demand amid concern that new virus variants would lead to more lockdowns, while vaccine rollouts are slower than expected in some countries.
Although crude oil accounts for eight per cent of Nigeria’s gross domestic product (GDP), it contributes over 90 per cent of Nigeria’s foreign exchange earnings.
The 2021 budget, which was signed by the President Muhammadu Buhari on December 31, 2020, was based on an oil price benchmark of $40 per barrel and a production level of 1.86 million barrels per day.
The resurgence in the price of crude oil bodes well for the Nigerian economy, as this would boost the country’s revenue needed for the implementation of the 2021 budget, improve crude oil receipts, and consequently bolster foreign exchange inflows.