Nigeria’s foreign reserves hopeful as oil prices rise on U.S crude fall

There is increasing possibility that Nigeria’s foreign exchange (forex) reserves will rise in coming days as oil prices increased Wednesday on fall in f  U.S crude inventories for seven consecutive weeks amidst geopolitical tensions in the Middle East. 

The oil market rallied following a larger-than-expected oil inventory withdrawal reported by the American Petroleum Institute (API).

Brent crude rose 0.7 per cent to $81.25 per barrel, according to data from the global commodity market. US benchmark West Texas Intermediate (WTI) increased 0.7 per cent to $78.92 per barrel, after closing at $78.35 in the prior session.

If confirmed by the Energy Information Administration (EIA), this would be the seventh weekly decline in a row, ING commodities strategists Ewa Manthey and Warren Patterson said in a note.

Analysts said geopolitical risks in the Middle East remain elevated, with the market allocating an increased risk premium for oil because of uncertainty over any Iranian response to Israel.

The API reports that US crude oil inventories fell significantly by 5.2 million barrels last week, compared to the market expectations for a draw of just 0.9 million barrels.

Crude stockpiles at Cushing decreased by 2.3 million barrels, ING said. Product inventories remained mixed, with gasoline stocks falling by 3.7 million barrels while distillate inventories rose by 612k barrels. The more widely followed EIA inventory report will be released later today.