Oil Prices yesterday showed significant upward gain hitting their highest levels since 2014 as a result of the ongoing production cuts led by the Organisation of Petroleum Exporting Countries, (OPEC), as well as healthy demand.
Analysts said the development is a good omen for major oil producing countries like Nigeria, but cautioned that markets may be overheating.
A broad global market rally, including stocks, has also been fuelling investment into crude oil futures.
US West Texas Intermediate, WTI, crude futures were at $63.40 a barrel Up by 44 cents, or 0.7 per cent, above their last settlement. They marked a December-2014 high of $63.53 a barrel in early trading.
Brent crude futures were at $69.15 a barrel, 33 cents, or 0.5 per cent, above their last close. Brent touched $69.29 in late Tuesday trading, its strongest since an intra-day spike in May 2015 and, before that, in December 2014.
“The extension of the OPEC agreement and declining inventories are all helping to drive the price higher,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.
In order to push up prices, OPEC, Russia and a group of other producers last November extended an output cut deal that was due to expire in March this year to cover all of 2018.