Global benchmark, Brent crude, extended its gains on Thursday, trading around $34 per barrel after falling to a 12-year low of $27 last week.
Following the further slide in oil price this month, there have been calls for a downward review of the oil benchmark price of $38 proposed by President Muhammadu Buhari for this year’s budget.
The surge in the price this week followed expectations that major producers might cooperate to cut output, a move that will reduce the supply glut in the market. Gains have gathered pace this week on speculation that Russia and the Organisation of Petroleum Exporting Countries may agree to reduce production.
Russia said on Thursday that OPEC kingpin, Saudi Arabia, had proposed global oil production cuts of up to five per cent in what would be the first universal deal in over a decade to help clear a glut of crude and prop up sinking prices.
The Russian Energy Minister, Alexander Novak, said Saudi Arabia had proposed that oil-producing countries cut production by up to five per cent, which for Russia, the world’s top producer, would represent around 500,000 barrels per day.