Oil Extends Gains, Naira Appreciates After CBN Rate Cut
Oil Extends Gains, Naira Appreciates After CBN Rate Cut
Oil prices continued their upward momentum on Wednesday, buoyed by tighter supply signals and policy adjustments in Nigeria, where the Central Bank trimmed its benchmark interest rate for the first time in months.
Brent crude futures climbed 19 cents, or 0.3 per cent, to $67.82 a barrel as of 5:00 a.m. WAT. The gain extended Tuesday’s rally, when the benchmark rose by more than $1 after negotiations to resume exports from Iraq’s Kurdistan region stalled, halting pipeline shipments to Turkey.
The deadlock persists as producers in the region demand debt repayment guarantees before restarting flows, further tightening global supply expectations.
Adding to the bullish outlook, industry reports showed that U.S. crude inventories declined last week, a development that often signals stronger demand or constrained supply, both supportive of higher prices.
The positive sentiment in global oil markets coincided with a boost for Nigeria’s currency.
The naira appreciated to ₦1,487.36 per dollar in the official foreign exchange (FX) window on Tuesday, reflecting improved investor confidence after the Central Bank of Nigeria (CBN) announced a surprise rate cut.
The apex bank reduced its benchmark interest rate by 50 basis points to 27 per cent, down from 27.5 per cent in July. Analysts say the move signals a cautious easing cycle, aimed at supporting credit growth and easing borrowing costs for businesses while balancing inflationary pressures.
Nigeria, Africa’s largest oil producer, relies heavily on crude exports for foreign exchange earnings and government revenue. Analysts note that higher oil prices, coupled with a stronger naira, could provide short-term relief for fiscal and external balances, though risks remain from fluctuating production levels and ongoing FX market pressures.
With oil markets tightening globally and domestic monetary policy shifting toward easing, investors will be watching closely for how these trends shape Nigeria’s economic outlook in the final quarter of 2025.
