By SIMEON OGOEGBULEM
Global oil prices rose on Wednesday as renewed concerns over supply disruptions in the Middle East and declining United States crude inventories supported the market.
Brent crude futures gained $1.61, or 1.5 per cent, to $110.40 per barrel, while United States West Texas Intermediate crude rose $1.45, also 1.5 per cent, to $99.27 per barrel, according to Reuters market data reported on October 21.
The increase followed a volatile trading session in which hopes for diplomatic mediation competed with concerns about continuing threats to regional energy supplies.
Market uncertainty has been heightened by tensions involving Iran and risks to maritime traffic around key shipping routes in the Middle East.
Reuters reported that at least 18 vessel attacks had been recorded over the preceding two weeks, while security threats had extended beyond the Strait of Hormuz into the Gulf of Oman.
The United States oil market also received support from a reported 4.9-million-barrel decline in crude inventories for the week ended October 16, based on American Petroleum Institute data.
Lower inventories can support prices by signalling tighter available supplies, although broader market movements also depend on demand expectations, production and geopolitical developments.
The latest increase comes as international efforts to ease Middle East tensions continue, with diplomatic initiatives involving Iran, Qatar and Pakistan yet to provide a clear resolution to the supply concerns.
For Nigeria, a major crude-oil producer, higher international prices could increase government revenue from oil exports. However, the effect on public finances depends on production levels, export earnings, exchange rates and the amount of crude available for domestic use.
Higher global crude prices do not automatically translate into an immediate increase in petrol prices in Nigeria, which also depend on exchange rates, refining and import costs, distribution expenses and domestic market conditions.
Investors are expected to continue monitoring developments in the Middle East and fresh inventory data for indications of the direction of oil prices.
