Dollar reserves of the Central Bank of Nigeria (CBN), have been rising in the past month hitting a high of $37.2 billion.
This is a signal that the CBN is receiving more dollars from oil sales due to higher prices and production volumes by Nigeria as well as lower demand for dollars by corporates in late December into early January 2023, sources told MoneyCentral.
In December 2022, Nigeria recorded her highest oil production since April 2022, the latest Platts survey by S&P Global Commodity Insights revealed.
The country’s oil production has been faced with oil theft that has hampered exports and resulted in significant oil spills and loss of millions of dollars.
However, the Platts survey released last week showed that Nigeria’s volumes rebounded to the highest since April of 2022, producing 1.33 million b/d in December, contributing significantly to OPEC’s increased oil production in the period.
Optimism that China’s reopening from COVID restrictions will lift fuel demand in the world’s top crude importer kept prices near 2023 highs, reached after a surge in prices last week.
Brent crude fell 64 cents, or 0.8%, to $84.64 a barrel by 0525 GMT, while U.S. West Texas Intermediate crude was at $79.30 a barrel, down 56 cents
The Central Bank of Nigeria (CBN) has been rationing dollars in the economy since the first quarter of 2020 when the impact of the coronavirus pandemic first began to affect oil prices.
Analysts say with oil prices now near the $90 per barrel level, the CBN has more firepower and has been quietly working to clear all legitimate backlogs of FX demands especially from foreign investors.