KEY POINTS
- Nigerian crude prices edge higher following sharp drawdown in US oil inventories.
- Market sentiment lifted by renewed hopes of a US–China trade thaw and a new deal with South Korea.
- Dangote’s upstream oil venture expected to begin production before year-end, adding supply to the domestic market.
Nigerian crude prices held firm on Wednesday as data showed that US oil and fuel inventories dropped more than expected, offering a fresh spark to global oil markets.
Bonny Light crude closed at $66 per barrel, slightly up from the previous session, buoyed by renewed optimism over potential progress in trade negotiations between Washington and Beijing.
Though still below its October peak of $75 per barrel, the modest recovery underscores how sensitive the oil market remains to geopolitical shifts and economic data from the world’s largest consumers.
West Texas Intermediate crude rose 0.6 per cent to settle at $60.5 per barrel, while Brent crude gained 0.8 per cent to finish the day at $65.
The rally came after figures from the US Energy Information Administration revealed a steep fall in inventories, crude stockpiles plunged by nearly seven million barrels, well above analysts’ forecasts of a mere 211,000-barrel drop.
The data hinted at robust demand across the US economy and forced traders to reconsider earlier assumptions of a looming oil surplus amid surging production from OPEC+ and American producers.
Global trade sentiment steadies energy markets
Market sentiment improved after former US President Donald Trump expressed confidence that talks with Chinese leader Xi Jinping were moving in a positive direction.
His upbeat tone eased fears that the prolonged trade rift between the two economies could further dampen global growth and suppress energy demand.
At the same summit, Washington and Seoul finalised a long-contested trade agreement, another sign that tensions in the global trade arena might be softening.
Analysts believe the double dose of diplomatic progress could steady oil prices in the short term, though lingering concerns over slowing global growth and rising debt levels in key markets still cast a shadow over the broader outlook.
Meanwhile, the US Federal Reserve, in a split decision, trimmed interest rates by 25 basis points. Chair Jerome Powell’s subsequent remarks left investors uncertain about the central bank’s next move, further tempering confidence across energy and financial markets.
Crude benchmarks had recorded their strongest weekly gains since June after Washington imposed sanctions on Russian energy giants Lukoil and Rosneft during Trump’s second term. However, speculation of an OPEC+ production hike and doubts about the effectiveness of sanctions in curbing oversupply pulled prices lower, with both WTI and Brent slipping by nearly 2 per cent.
