Oil traded above $44 a barrel in Asia Monday, extending gains on hopes crude producers would agree to freeze output at a meeting next month, easing a stubborn global supply glut.
Recall that President Muhammadu Buhari pegged crude oil price in the 2016 budget at $39 per barrel.
At around 0620 GMT, US benchmark West Texas Intermediate for delivery in September was up 39 cents, or 0.88 percent, at $44.88 a barrel and Brent crude, which Nigeria is trading gained 36 cents, or 0.77 percent, to $47.33 for delivery in October.
Saudi Arabian oil minister Khalid al-Falih’s comments last week that producers could discuss action to stabilise markets lifted market sentiment, helping prices rebound since closing below $40 a barrel and tumbling into a bear market earlier this month.
Any agreement to curb production would help rebalance the crude oil market, where output has been running ahead of demand, analysts said.
Both contracts rose more than six percent last week following the Saudi minister’s remarks.
“Oil is now close to an equilibrium price, and unless we get further developments, I would expect to see it trading around the $44 to $45 level for the balance of the week,” Michael McCarthy, a chief market strategist in Sydney at CMC Markets, told Bloomberg News.
