Oil prices held near three-year highs on Monday and looked set to rise for the second straight month despite dips in prices prompted by rising U.S. rig counts. Brent crude futures were down 36 cents per barrel as of 1:59 p.m. HK/SIN, to $74.28 per barrel. U.S. WTI futures were down 20 cents per barrel to $67.90 per barrel. Brent prices are still up around 6 percent this month.
Despite the modest declines analysts remain optimistic that oil prices will be supported and that the trend will remain toward the upside. The strength in the oil markets is stemming from increased global demand as well as the possibility for fresh U.S. sanctions against Iran which could reduce supply and increase prices.
According to General Electric’s Baker Hughes energy services firm, the United States added five oil rigs last week, bringing the total count to 825, the highest level in 3 years. U.S. crude production has increased more than 25 percent since mid-2016. Currently only Russia produces more than the U.S.
Later on Monday U.S. President Donald Trump will be hosting Nigerian President Muhammadu Buhari at the White House, in an effort to build a cordial relationship between the nations after a run of missteps. In January, Trump allegedly referred to African nations using inappropriate language, a comment which the White House did not deny. On the agenda for the meeting is the promotion of mutual economic growth, fighting terrorism and establishing Nigeria as a democratic leader in the region.
Nigeria, Africa’s most populous nation, is currently the largest oil producer in Africa, though it has been plunged into recession for the first time in 25 years because of the volatile oil prices. Buhari also recently met with Shell executives in London where he discussed the possibility of a $15 billion investment in Nigeria.