Oil prices hit their highest levels of the year on Friday, driven up by lower US production and a weak dollar.
Both US and Brent crude prices hit 2016 peaks, trading as high as $46.27 and $48.30 a barrel respectively.
The recent increase in oil prices at Global markets is a good indication to president Muhammadu Buhari government with the price of oil pegged at $38 per barrel.
A weaker US dollar typically contributes to a rise in oil prices, because oil is priced in dollars. When the dollar weakens against other currencies, oil becomes cheaper to buy, pushing up demand.
However, the latest rise in oil prices may be limited by a future increase in Middle East production, according to a note released by Deutsche Bank.
Iraq and the UAE are likely to raise production after maintenance issues are resolved, Deutsche indicated, and Saudi Arabia may also increase production significantly.
“A sustainable rise in Opec production may be just around the corner, and… the rally may pause,” Deutsche said.
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