The Nigeria government has good chance of improving its revenue profile for the 2021 budget as crude oil prices on Monday exceeded $60 per barrel in the international market. This was indicated as the first time prices of crude oil are rising so high in the global oil market.
It was gathered that brent oil prices rose above $60 per barrel in the global market on Monday.
It was said that investors are growing increasingly optimistic about demand as the global economy recovers from the coronavirus pandemic.
Market report indicated that crude oil rose by 1.26 per cent to $60.19 a barrel on Monday, the highest since January 2020. Asset markets were said to have rallied on the back of vaccine rollouts, slowing virus infections and hopes that President Joe Biden’s huge stimulus proposal will be passed by US lawmakers.
It was further indicated that crude oil has been on the rise for weeks since President Joe Biden began to push his $1.9 trillion rescue package, which includes big cash handouts and a hike in the minimum wage.
Report also indicated that Treasury Secretary, Janet Yellen, remarked that if the spending package was passed in its entirety, “we would get back to full employment next year”.
It was added that the upbeat mood is data showing new infection rates, with last week seeing the lowest since October, while governments begin to get to grips with inoculations. This showed hopes for the long-term outlook overshadowed figures showing a rise in US inventories.
Axi strategist, Stephen Innes, was cited to have said: “Oil traders ignore the sidelines’ spare capacity and continue to take an optimistic view of the US reopening narrative as vaccination protocols should continue to flatten the curve and with the gale-force stimulus tailwinds supporting a spring break reopening, (it’s) providing rocket-fuelled optimism for the oil market.”
With the intervention policy in the US rolled out by Biden, there is high expectation of further rise in the price of crude oil in the international. This could provide respite for the Nigerian government that has been facing the crisis of revenue shortfall and resorting to heavy debts to fund the budget.