The international oil benchmark, Brent crude, soared by almost five per cent on Tuesday after sliding to a seven-month low of $56 last week.
Oil prices rose after the United States said it would delay imposing a 10 per cent tariff on certain Chinese products, easing concerns over a global trade war that has pummelled the market in recent months.
Brent, against which Nigeria’s oil is priced, increased by $2.74 to $61.31 per barrel as of 7:50pm Nigerian time, while the US West Texas Intermediate rose by $2.27 to $57.20 per barrel.
The 2019 budget, which was signed by President Muhammadu Buhari in May, was based on oil production of 2.3 million bpd (including condensates) with an oil benchmark price of $60 per barrel.
In a related development, some prompt-loading Nigerian crude cleared on Tuesday but there was still an overhang of at least 25 cargoes of Nigerian grades due to the plentiful availability of light, sweet crude in the Atlantic Basin, according to Reuters.
Nigerian September loading Brass River was said to be on offer at dated Brent plus $2, Usan at dated Brent plus 70 cents, Qua Iboe at dated Brent plus $2.245-$2.65 a barrel and Forcados at dated Brent plus $2.25 for early September and close to plus $2.70 for end-month cargoes.
Traders said that Glencore sold a cargo of end-August loading Qua Iboe into the Mediterranean, while one said the cargo was split with some of the oil going to Italy.
Reuters reported on Friday that Nigerian oil had suffered its slowest sales of the year in August as US’ exports of competing light, sweet grades flood traditional markets in Europe and Asia.
It said crude from Nigeria, Africa’s top exporter, had largely been pushed out of the US market in the last decade due to booming domestic output.
Exports to the US slid to zero for three weeks in July, according to the US Energy Information Administration.
Authored By: Femi Asu