Oil surged to the highest in nearly 10 months in New York alongside a broader market rally as breakthroughs on U.S. stimulus talks combined with the Covid-19 vaccine rollout stoked optimism around a demand revival.
That should be a boon to Nigerian government finances and oil stocks which are the worst performing on the domestic bourse.
U.S. benchmark crude futures rose 1.3 percent on Tuesday after Senate Majority Leader Mitch McConnell said Congress will not leave for the year without a spending package, as talks continue to finalize Covid-19 relief. Meanwhile, Moderna Inc.’s vaccine was deemed safe by U.S. regulators, clearing the way for a second shot to quickly gain emergency authorization.
However the International Energy Agency had earlier trimmed its demand forecast for 2021 and said the crude oil glut left behind by the coronavirus pandemic will not likely clear until the end of next year.
The IEA’s dismal demand projections follow OPEC’s decision to cut its own forecasts for consumption in the first quarter of 2021 as the group and its allies prepare to start returning some supply to the market from January.