Good news for Nigeria as Brent Crude reaches $70 per barrel, foreign reserves expected to rise

Brent Crude, the international oil benchmark for Nigeria, hovered near a three-year high of over $70 per barrel on Monday on signs that production cuts by the Organisation of Petroleum Exporting Countries and Russia were tightening supplies.
Brent rose to a high of $70.23 as of 7 : 45 pm Nigerian time, while the United States’ West Texas Intermediate stood at $64.90 per barrel. Both benchmarks hit levels not seen since December 2014.

The rise has been described as good for Nigeria as oil revenue and foreign reserves are expected to rise.

According to the CBN, Nigeria’s external reserves hit a four-year high of $40.4bn on January 5, 2018.
The rise in oil prices means further accretion to the Excess Crude Account, into which the country saves the difference between the market price of oil and the budget benchmark to provide a cushion when oil prices fall or extra cash is needed for spending on infrastructure.

A production -cutting pact between OPEC, Russia and other producers has given a strong tailwind to oil prices.

Meanwhile, sellers lowered their offers in West Africa as the market braced for March export plans over the coming days, according to Reuters.