The rise in crude oil prices has created new hope for stability of the naira. Oil prices moved higher after an industry report showed that U.S. inventories of crude fell more than analysts had expected.
Brent crude was up 15 cents, or 0.3 per cent, at $44.65 a barrel, after falling around one per cent on Tuesday. The naira traded in a stable range, maintaining levels around N475 to the dollar in the parallel market, as oil — Nigeria’s biggest forex earner — hit the highest levels since March.
As uncertainty persists since the Central Bank of Nigeria’s unification call, analysts see the currency sustaining similar levels in coming days.
This bolsters hopes that fuel demand in the world’s biggest economy can weather the coronavirus pandemic. West Texas Intermediate oil was up nine cents, or 0.2 per cent, at $41.70 a barrel, having dropped 0.8 per cent in the previous session.
“Oil prices are rising as the crude demand outlook improves,’’ said Edward Moya, senior market analyst at OANDA. The American Petroleum Institute said, on Tuesday, that crude stocks fell by four million barrels last week, more than analysts’ expectations of a 2.9 million-barrel draw.
Official government data is due on Wednesday. Still, growing uncertainty over a stalemate in Washington in talks for a stimulus package to support recovery from the deepest impact of the pandemic may weigh on prices looking ahead.
