Oil kicks off 2017 at $58 as OPEC deal takes effect

Crude oil prices are having a good rally on the first trading day of 2017, after recording the biggest annual leap in seven years.

In 2016, Brent crude, the international benchmark for crude oil, rose by more than 50 percent — the biggest annual gain since surviving the global economic crisis of 2009.

Brent traded as low as $27.10 per barrel in January 2016, only to close the year above $56 per barrel.

As of 11am on Tuesday, January 3, Brent crude was trading at $58.10 per barrel, while West Texas Intermediate (or US oil) was at $55.04.

Both grades of crude had gained over one dollar and 20 cents on a barrel, from the previous day closing, as the deal reached by the Organisation of Petroleum Exporting Countries (OPEC) took off from January 1, 2017.

In December, 13-state OPEC had reached a deal to cut output at 32.5 million barrels per day.

The cartel got the cooperation of non-OPEC states like Russia, Bahrain, Equatorial Guinea and eight others in the first oil deal since 2001.

The current spike in prices is reported to be as a result of an output cut of 130,000 barrels by Kuwait, an OPEC member state, trimming its output to about 2.75 million a day.

The Nigerian currency, the naira, opened the year at 490 to the dollar — its 2016 closing price — and 590,  402 to the pound sterling and euro, respectively.