THE global benchmark, Brent crude, on Friday rose above Nigeria’s proposed benchmark oil price of $38 per barrel for this year’s budget.
Brent, against which Nigeria’s oil is priced, extended the gains recorded in recent days on Friday, rising by $1.46 to $38.53 per barrel, a level last seen in December.
The increase in the oil price followed the talk that some members of the Organisation of Petroleum Exporting Countries planned to meet other oil producers in Russia around March 20 for new talks on an oil output freeze.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, stated this on Thursday, forecasting the meeting would spark a dramatic reaction in crude prices.
Nigeria has been pushing for action by the OPEC because the slump in oil revenue has undercut its public finances and currency.
ALSO SEE: Russia, Saudi agreement may push crude price up — Kachikwu
“But if the meeting that we’re scheduling between the OPEC and non-OPEC producers happens about March 20, we should see some dramatic price movement.”
“Both the Saudis and the Russians, everybody is coming back to the table,” Kachikwu said. “I think we’re very humbled today to accept that if we get to a price of $50, it will be celebrated. That’s a target that we have.”
Oil prices have lost two thirds of their value since mid-2014 due to a glut of supplies caused by booming output from the United States and OPEC.
Brent had since mid-December 2015 continued to trade below the $38 per barrel mark. In January, it fell below $30 per barrel, its lowest in more than a decade.
Following the sustained decline of the oil price, there have been several calls for a downward review of the benchmark.