By Sebastine Obasi, with Agency report
OIL prices rose, yesterday,  as evidence that the Organisation of Petroleum Exporting Countries, OPEC, and other big exporters were cutting production outweighed a sharp rise in the United States crude and gasoline stockpiles.

Brent crude was up 50 cents at $57.30 a barrel, while U.S. light crude gained 30 cents to $54.18. Both crude oil benchmarks are now near the top of recent price ranges. Brent, for most of the past two months, have been trading between $53 and $58 a barrel, at a premium of around $2.50 to the U.S. crude futures contract.

The uptick in crude oil prices is robbing off positively on Nigeria’s fiscal and monetary profiles for 2017, especially on budget deficit and external reserves.

External  reserves

The 2017 budget estimates have been based on $42.5/barrel, indicating a significant headroom to narrow the estimated N2.4 trillion deficit if the oil price is sustained even at current levels. Also the improved oil prices have rubbed off positively on the external reserves which has been on the rise since November last year due to the improved prices since last quarter of 2016.

“The current sentiment is bullish,” said Tamas Varga, analyst at London brokerage PVM Oil Associates, but added, “We are still firmly within the ranges. I think buyers will shy away if the market jumps another dollar.”

U.S. crude oil inventories rose last week by an unexpected 6.5 million barrels to 494.76 million barrels, the Energy Information Administration said. The build-up in crude stocks far exceeded analysts’ expectations of an increase of 3.3 million barrels. Gasoline stocks climbed by 3.9 million barrels, compared with analysts’ expectations of one million barrel gain. Inventories in the United States, the world’s biggest oil consumer, have been near record highs for much of the past year and domestic production is rising as U.S. companies drill for shale oil. But prices have been underpinned by indications that producers from OPEC and other exporters are cutting output. The curbs follow an agreement last year by OPEC and other exporters to reduce supplies by a combined 1.8 million barrels per day (bpd) to prop up prices that remain at about half their mid-2014 levels.  A Reuters survey this week found that most key oil producers were sticking to the deal, with compliance above 80 percent. Russian oil output contracted in January by 100,000 bpd, Energy Ministry data showed on Thursday. Tension between the United States and Tehran is also rising after Iran tested a ballistic missile, raising the possibility of future sanctions that could curb Iranian oil supply.