With the Organisation of Petroleum Exporting Countries OPEC meeting later today Wednesday, oil price has gone past $105 a barrel in the international market.
The OPEC) meeting will have in attendance its allies, including Russia, known as OPEC+.
Brent Crude futures sold up to 7.35 per cent to $105.66 a barrel, at 16.30 GMT+1, while West Texas Intermediate Crude gained 7.54 percent to $103.32 a barrel all on Tuesday.
The increase is as aresult of OPEC and its allies cutting production to prevent oversupply in the global oil market
The meeting is expected review OPEC+ monthly oil output amid the Russia-Ukraine conflict.
Tamas Varga, an analyst at PVM Oil Associates, told Reuters: “OPEC will likely stick to its original plan of a monthly 400,000 bpd increase, which will not alleviate fears”.
“The U.S. is coordinating an additional SPR (strategic petroleum reserve) release, and today, the IEA’s extraordinary meeting should also address the issue of energy security. These might provide short-term relief.”
Recently, global oil prices have soared amid concerns that Russia’s invasion of Ukraine could trigger supply disruptions in the global oil market.
“The fragile situation in Ukraine and financial and energy sanctions against Russia will keep the energy crisis stoked and oil well above $100 per barrel in the near-term and even higher if the conflict escalates further,” Louise Dickson, senior oil market analyst from Rystad Energy, wrote in a note.
Timipre Sylva, minister of state for petroleum resources, had said the increase in oil prices would move Nigeria away from its comfort zone.
In Nigeria, high oil price means high subsidy payments. This year, the government said it would spend up to N3 trillion to cater for PMS price shortfall.
