Brent crude the equivalent of Nigeria’s sweet crude rose more than $1 a barrel on Friday as markets watched for a possible direct conflict between Israel and Iran. This means that Nigeria will earn more re venue and foreign exchange in the coming months. It will help to sustain the 2924 budget and stabilise the foreign exchange market. Brent crude was up $1.00, or 1.1%, to $91.65 a barrel). U.S. West Texas Intermediate crude was at $87.34 a barrel, up 75 cents, or 0.87%. Both benchmarks settled on Thursday at their highest level since October. Brent and WTI are set to notch a more than 4% gain this week after third-largest OPEC producer Iran vowed revenge against Israel for an attack that killed high-ranking Iranian military personnel.
“If Iran directly attacks Israel, that’s never happened before,” said Phil Flynn, analyst at Price Futures Group. “It’s just another geopolitical risk domino about to fall.” Israel has not claimed responsibility for the attack on Iran’s embassy compound in Syria on Monday. Ongoing Ukrainian drone attacks on refineries in Russia may have disrupted more than 15% of Russian capacity, a NATO official said on Thursday, hitting the country’s fuel output. The Organisation of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known as OPEC+, this week kept their oil supply policy unchanged and pressed some countries to increase compliance with output cuts. “Further clampdowns on adherence to quotas should see output fall further in Q2,” ANZ analysts Daniel Hynes and Soni Kumari wrote in a note. The prospect of a tighter market should see a drawdown in inventories during the second quarter.”
Meanwhile, U.S. job growth beat expectation in March according to official data released on Friday which also showed a steady increase in wages. The nonfarm payrolls increase points to likely robust oil demand but potentially delays anticipated interest rate cuts by the U.S. Federal Reserve later this year. This comes amid solid global oil demand growth of 1.4 million barrels per day (bpd) in the first quarter, JPMorgan analysts wrote in a note. “Our high-frequency demand indicators estimate that total oil consumption in March averaged 101.2 million bpd, 100,000 bpd above our published estimates,” they said.
