Oil prices rise above $40 per barrel, hit 2016 high

Following expectations that the Organisation of Petroleum Exporting Countries, OPEC, was targeting a higher anchor price after a sell-off that has lasted nearly two years, the price of Brent crude on Monday rose for the sixth consecutive trading day in a row, hitting a 2016 peak of over $40 a barrel.

The rise in global oil prices is coming at a time the President of Dangote Group, Alhaji Aliko Dangote advised Nigerians to stop viewing the low oil price environment as a setback, asserting that the situation offers the nation an opportunity to diversify its revenue base.

Reuters reported that oil prices also got a boost from data showing a smaller-than-expected build-up in stockpiles at the Cushing, Oklahoma delivery hub for United States crude futures.

Despite the rebound in crude price, some analysts cautioned that the global crude glut remained a huge challenge.

Brent, the global benchmark crude, rose by $2.18 at $40.90 yesterday, while its session peak was $41.04, the highest since December 9, 2015. United States’ WTI crude was also up $2 at $37.92 a barrel, after hitting a two-month high and closing at $38.11.

Major OPEC producers are privately starting to talk about a new oil price equilibrium of $50, New York-based consultancy PIRA told Reuters.