Revenue concern for Nigeria and other oil producing countries is brighten with oil prices kicking off the new year higher on Thursday as warming trade relations between the United States and China eased demand concerns, while rising tensions in the Middle East fueled worries about supply.
Global benchmark Brent crude futures LCOc1, rose 35 cents, or 0.5 per cent, to $66.35 a barrel by 0738 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 was up 25 cents, or 0.4 per cent, at $61.31 per barrel.
Oil markets were closed on Wednesday for New Year’s Day.
Both benchmarks ended higher in 2019, posting their biggest annual gains since 2016, buoyed at the end of the year by a thaw in the prolonged trade dispute between the United States and China – the world’s two largest economies – and a deeper output cut pledged by the Organization of Petroleum Exporting Countries (OPEC) and its allies.
“Oil remains supported by the back-burner trade truce and the uptick in political unrest in Iraq,” Stephen Innes, chief Asia market strategist at AxiTrader, told Reuters.
The U.S. military carried out air strikes against Iran-backed Katib Hezbollah militia group over the weekend. Angry at the air strikes, protesters stormed the U.S. Embassy in Baghdad on Wednesday, although they withdrew after the United States deployed extra troops.
In 2020, Brent is forecast to average $63.07 a barrel, up from December’s estimate of $62.50, while WTI is forecast to average $57.70 a barrel, up from December’s estimate of $57.30, as the OPEC-led supply cuts and the expectations of a U.S.-China trade deal boosted analysts’ views on the prospects for the year, a Reuters poll showed.