Oil prices kept going up on Monday, with Brent crude almost reaching $80, because of growing problems in the Middle East and possible issues to regional exports. By 1:16 PM GMT, Brent crude futures went up by $1.09, or 1.4%, to $79.14 per barrel, and U.S. West Texas Intermediate (WTI) crude futures increased by $1.15, or 1.55%, to $75.53 per barrel.
This increase in prices happened after a big jump last week, with Brent crude going up 8% and WTI rising 9.1%. People were worried that Israel might attack Iranian oil facilities after Iran’s missile attack on October 1. On Monday, things got worse when rockets from a group supported by Iran, called Hezbollah, hit Haifa, Israel’s third-largest city. Israel seemed ready to start more ground operations in southern Lebanon.
The Organization of the Petroleum Exporting Countries (OPEC) and its partners, which include Russia, plan to start increasing oil production in December. This comes after they recently reduced production to help keep prices up due to low global demand. But experts say OPEC+ could face problems if Iran responds by attacking oil facilities in nearby Gulf countries.
This change is likely to improve Nigeria’s financial situation, as the oil price used for the 2024 budget is lower than the current market price. Also, higher oil prices might help stabilise the Naira, which has been falling and is currently around N1540/$ in the official market and even lower in the unofficial market.
A year ago, when the Middle East conflict began, Brent crude oil was trading at $88.15 per barrel. Last month, Brent crude futures dropped below $70 per barrel for the first time since December 2021. This was due to increased supply, concerns about demand, and a lot of speculative selling.
