Oil steadied after rallying to a 10-month high on forecasts by OPEC and the US that output cuts will tighten the market in the months ahead.

West Texas Intermediate traded near $89 a barrel, after rising 1.8% on Tuesday. The Organisation of Petroleum Exporting Countries said it expects a shortfall of 3.3 million barrels a day in the fourth quarter, while the US Energy Information Administration predicted a more modest 230 000-barrel deficit.

“These numbers will cause some to question OPEC’s claims that their main objective is to keep the market balanced as their own numbers clearly do not show this,” said Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. “Some key consuming nations will be getting a bit concerned about stronger prices.”

The bullish outlooks added more impetus to a rally that’s been underway since mid-June as Saudi Arabia and Russia curbed supply and US and Chinese demand proved relatively resilient. The International Energy Agency publishes its monthly report Wednesday, offering more clues on the state of the market.

The industry-funded American Petroleum Institute said nationwide US crude inventories rose by 1.17 million barrels last week, with gasoline and distillate stockpiles also expanding. However, holdings at the key oil storage hub in Cushing, Oklahoma, declined by 2.42 million barrels. Official data will be published later on Wednesday.

The National Petroleum Investment Management Services (NAPIMS) has revealed that Nigeria needs about $30 billion to be able to meet its domestic energy need. This came shortly before the signing of a gas sales and aggregation agreement between Dangote Fertiliser and the NNPC Limited and its joint venture partners: Shell, TotalEnergies, NOAC, and Eni, for supply of 70 million cubic feet of gas daily for the production of fertiliser.

Group General Manager of NAPIMS, Bala Wunti, who spoke at the ongoing Nigerian Energy International Summit (NIES) on Wednesday in Abuja, stated that following projections that demands for oil would massively outstrip supply in the coming years as bevoning witnessed in bits, huge investment was urgently required to bridge the gap. According to him, Nigeria is hopeful of raising the needed funds through direct foreign investment and through domestic investment. He said: “Ordinarily, what we need is to attract investment and I’m looking eyeball to eyeball with George.

He doesn’t want foreign direct investment you want domestic direct investment. “I don’t know how many Nigerian banks that can give me N200 million now, talk less of $200 million. But you know what? I need $30 billion dollars today to be able to cover my domestic needs.

“I don’t think we have that capacity and this chart will show you the tension that we were in the year 2000. Our investment is going higher but it prominated and its hovering between $2 billion to $2.5 billion foreign direct investment. We see a spike that spike is the one that Osagie created when he sold the assets that he sold and the money came from where it came through buyer. “What we need to do is basically to leverage upon our resource base and our resource base is gas, we are a gas country despite our liquid. We need the combination of foreign direct invesyment and domestic investment so we can move on and when we get the monies we should do theee things; support national development and growth by enabling economic development industrialization, support generation of electricity and support generation for foreign inflows.

“So we want to export our gas, we want to use that gas to convert it to electricity but most importantly, to convert it to a gas based industries producing fertiliser, petrochemicals.” Speaking just before the deal was signed, the Group Managing Director of NNPC, Mele Kyari, said gas would be delivered to the Train-2 of Dangote fertiliser.

He said: “This increase gas utilisation in the domestic market but more importantly it is the platform that will enable increased local production of fertiliser in our country. It will accommodate government drive to ensure that we are self sufficient in fertiliser production in our country.” In his response, Charman of Dangote Group, Alhaji Aliko Dangote, said the deal would not just make Nigeria self sufficient but also a net exporter of fertiliser.