Global oil price surpassed $105 a barrel ahead of the meeting of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, known as OPEC+.
On Tuesday, Brent Crude futures settled up 7.35 percent to $105.66 a barrel, at 16.30 GMT+1.
West Texas Intermediate Crude futures proportionally gained 7.54 percent to $103.32 a barrel.
OPEC and its allies adopted a production cut system to prop up prices and prevent an oversupply in the global oil market.
OPEC+ will meet on Wednesday to discuss monthly oil output amid the Russia-Ukraine conflict.
Reuters quoted Tamas Varga, an analyst at PVM Oil Associates, as saying, “OPEC will likely stick to its original plan of a monthly 400,000 bpd increase, which will not alleviate fears.”
“The U.S. is coordinating an additional SPR (strategic petroleum reserve) release, and today, the IEA’s extraordinary meeting should also address the issue of energy security. These might provide short-term relief.”
Recently, global oil prices soared amid concerns that Russia’s invasion of Ukraine could trigger supply disruptions in the global oil market.
“The fragile situation in Ukraine and financial and energy sanctions against Russia will keep the energy crisis stoked and oil well above $100 per barrel in the near-term and even higher if the conflict escalates further,” Louise Dickson, senior oil market analyst from Rystad Energy, wrote in a note.
Timipre Sylva, minister of state for petroleum resources, had said that increased oil prices would move Nigeria away from its comfort zone.
In Nigeria, high oil price means high subsidy payments. This year, the government said it would spend up to N3 trillion to cater for PMS price shortfall.