Weekend, global oil-markets saw Brent crude supported by Saudi Arabia hoping to cut October supplies, while United States crude was curbed by refinery-outages due to Hurricane-Harvey damages, which dented demand.
However, just as real focus was shifting to three other hurricanes that are currently tearing through the Caribbean and Gulf of Mexico, local oil industry analysts say the jump in oil price will help speed up Nigeria’s recovery from recession which it exited during the second quarter.
Observers are upbeat that with steady rise in oil prices, at least above $50, and sustained growth in manufacturing and forex illiquidity crisis, the Nigerian economy will recover fast.
Additional details gathered weekend showed that Brent crude futures rose to 54.57 dollars a barrel at 0735 GMT, with the benchmark for international oil prices earlier marking its highest since April at 54.79 dollars a barrel.
Saudi Arabia will cut crude oil allocations to its customers worldwide in October by 350,000 barrels per day, an industry source familiar with Saudi oil policy told Media on Thursday.
The United States West Texas Intermediate crude futures were at 48.98 dollars a barrel, 11 cents below their last settlement.
Traders said that the dip was a result of low refining activity following Hurricane Harvey, which hit the U.S. Gulf coast two weeks ago.
It knocked out almost a quarter of the country’s huge refinery industry, cutting demand for crude oil refining lifeblood.
“Most refineries are restarting and we expect a near-full recovery by month-end,” U.S. investment banker, Jefferies said.
Harvey’s impact was also felt in oil production. U.S. oil output fell by almost 8 percent, from 9.5 million barrels per day to 8.8 million bpd, according to the Energy Information Administration.
Port and refinery closures along the Gulf coast and harsh sea conditions in the Caribbean have also impacted shipping.
“Imports (of oil) to the U.S. Gulf Coast fell to levels not seen since the 1990s,” ANZ bank said.
Traders said it would take weeks for the U.S. petroleum industry to return to full capacity, and that under the current conditions it was difficult to identify fundamental market trends.