Oil price spikes to $56.45

Brent oil is trading higher at $56.45 per barrel Wednesday morning as it continues its longest winning streak since December last year.

The price of oil has been boosted by optimism that Saudi Arabia, OPEC’s largest producer will support an extension to the cartel’s out put cuts agreed last year to recalibrate the global oil market.

The price is also being helped by signs that US oil stockpiles may be shrinking.

US data last night showed that there had been a stronger crude oil draw down that had been estimated.

It was also reported that the Saudis pared their oil production last month to the lowest since January, staying well below the out put level it pledged to maintain under the production curbs agreed last year.

Surge in oil prices is good news for countries like Nigeria where about 90 per cent foreign earnings come from oil export.