Oil prices advanced by nearly 2% on Friday, approaching a fifth successive week of gains, with key producers consenting on a compromise to extend some cuts to supply in a bid to adapt to a demand weakened by COVID-19.
Brent, the benchmark for Nigerian crude grades, climbed by 93 cents or 1.9% to $49.64 per barrel by 08:48 West African Time, having risen by roughly 1% at the previous session. West Texas Intermediate gained 76 cents or 1.6%, trading at $46.40 after jumping by almost 1% on Thursday.
Bonny Light, Nigeria’s banner oil grade, appreciated by $0.20 or 0.41% on Thursday, closing at $48.68 as the oil prices of most crude grades gained across oil markets.
Qua Iboe, another major national crude grade, climbed $1.44 or 3.03% to $48.96 in early trading on Friday.
OPEC and Russia agreed on Thursday to reduce profound oil supply cut from January by 500,000 barrels per day (bpd) but could not agree on a wider policy for remainder of 2021.
Goldman Sachs said “OPEC+ clearing the hurdle of exiting its current cuts in a coordinated way … reinforces our conviction in a steady and sustainable rally in oil prices through 2021.”
The rise implies the Organisation of the Petroleum Exporting Countries (OPEC) and Russia, a cartel called OPEC+, are on track to pare down output by 7.2 million bpd or 7% of the world demand from January, compared to current cut level of 7.7 million bpd.
OPEC+ was anticipated to retain current cuts until March at least, following its withdrawal from plans to increase supply by 2 million bpd, a move expected to bolster oil prices.
Oil prices also drew strength from a bipartisan COVID-19 $908 billion, which gained momentum in the U.S. Congress on Thursday.