The 2021 budget estimates may not be unrealistic after all as crude oil prices, a major component of Nigeria’s budgeting process fell to a mine-month high on the back of a fall in crude stockpiles.
Analysts say, the development is a good one for Nigeria, saying, one man’s poison can actually be another’s meat.
Oil climbed to a nine-month high on yesterday after government data showed a fall in U.S. crude stockpiles last week, while progress towards a U.S. fiscal stimulus deal and strong Asian demand also buoyed prices.
The U.S. dollar also set a 2-1/2-year low against major rivals on Thursday. Oil prices generally rise when the dollar falls because crude priced in the greenback becomes cheaper for buyers holding other currencies.
Brent crude futures was up 14 cents at $51.22 a barrel by 1110 GMT, having traded as high as $51.90.
U.S. West Texas Intermediate (WTI) crude futures rose by 20 cents to $48.02 a barrel, having traded as high as $48.59. Both benchmarks hit their highest since early March.
“All the headlines have been bullish for oil prices,” said Edward Moya, senior market analyst at OANDA in New York.
“U.S. stockpiles posted a larger-than-expected draw, three of India’s refiners are operating almost at 100 per cent capacity, indicating crude demand remains strong, and it seems the U.S. will continue to deliver more monetary and fiscal stimulus, sending the dollar lower and most commodities higher.”