Nigeria’s prospects lifted as Oil hits $68.26 on fall in U.S. stockpiles

Prospects for Nigeria’s economy in the new year are brighter Thursday after oil rose to $68.26 a barrel, is extending gains from the highest close in three years as U.S. industry data show crude stockpiles have continued to decline amidst more than expected compliance to OPEC production curbs.
Brent for March settlement added 42 cents to $68.26 a barrel on the London-based ICE Futures Europe exchange after climbing 1.9 percent Wednesday to the highest close since December 2014. The global benchmark crude traded at a premium of $6.23 to March WTI.

US futures rose 0.9 percent to above $62 a barrel in New York after adding 2.1 percent on Wednesday. Inventories slid by 4.99 million barrels last week, the American Petroleum Institute was said to report. Government data Thursday is forecast to show supplies fell by 4.7 million barrels, which will be a seventh weekly decrease. OPEC’s output was unchanged in December as the group approached a fresh year of curbs, a Bloomberg survey shows.

Oil is extending gains after climbing more than 12 percent last year as the Organization of Petroleum Exporting Countries and its allies cut output to trim a global glut. However, the recent surge in New York crude may lead to growth in U.S. drilling and supply. The rig count will “substantially increase” with crude prices between $61 and $65 a barrel, according to 42 percent of industry executives surveyed by the Dallas Federal Reserve last month.

“We may soon see an end to the rally because prices at this level will only make U.S. drillers boost production,” said Will Yun, a commodities analyst at Hyundai Futures Corp. “Supply disruptions in the North Sea and Libya, falling U.S. stockpiles, and conflict in Iran have underpinned the momentum.”

West Texas Intermediate for February delivery was at $62.19 a barrel on the New York Mercantile Exchange, up 56 cents, at 7:46 a.m. in London. Total volume traded was about 62 percent above the 100-day average. Prices closed at $61.63 on Wednesday, the highest level since December 2014.

OPEC’s 14 members pumped 32.47 million barrels a day in December, according to a Bloomberg survey of analysts, oil companies and ship-tracking data. Libya saw a 30,000-barrel-a-day decline to 970,000 a day following a pipeline blast, which was offset by an increase from Nigeria.