Nigeria’s Bonny Light crude oil price touched it’s highest since 2014 at the weekend, supported by Organisation of the Petroleum Exporting Countries (OPEC) led production cuts, and likelihood of the United States taking military action in Syria increases.
Besides, Nigeria’s crude oil production increased from 1.792mbpd in February to 1.810 mbpd in March.OPEC and allies including Russia are keeping crude oil supply limits in place in 2018, to reduce a price-denting glut of oil held in inventories.
Also, the United State pledged recently that missiles would be fired at Syria and this is said to have threatened crude oil supply level thereby leading to higher oil prices.Nigeria’s Bonny Light attained its highest level at $72.73 a barrel, a little lower than Brent crude oil, which sold for $72.58 per barrels during the trading hours on Friday.
Bonny Light oil is a high grade of Nigerian crude oil produced in the Niger Delta basin and named after the prolific region around the city of Bonny.The very low sulfur content of Bonny Light crude makes it a highly desired grade for its low corrosiveness to refinery infrastructure and the lower environmental impact of its byproducts in refinery effluent.
The United States West Texas Intermediate (WTI) crude oil also hits $67.39 per barrel at the weekend.In March, the OPEC Reference Basket (ORB) increased by less than 0.5 per cent to $63.76 per barrel. Oil futures ended about one per cent higher in a relatively volatile month, following US equity market movements and supported by robust oil demand growth forecasts, tightening US crude stocks and geopolitical tensions.
For the month, the Dubai structure flipped back into contango, while Brent and WTI structure remained in backwardation, albeit at a reduced level before the latest price surge.
OPEC crude oil production dropped by over 201,000 barrels per day in March over the previous months, while production mainly decreased in Angola, Venezuela, Algeria and Saudi Arabia.
This OPEC said has been partially offset by higher production in the United Arab Emirates, according to the organisation’s latest crude oil report.OPEC expects the demand for its crude oil to be at 32.6 million barrels per day (bpd), 0.3 mbpd lower than in 2017.
Speaking recently on the efforts of OPEC toward price stability, OPEC Secretary General, Mohammad Sanusi Barkindo said that the global energy system is undergoing significant and speedy changes and becoming progressively complex.
He stated: “Our economies are increasingly interwoven. We must build on our common ground to face upcoming challenges together, strive for sustainable market stability and safeguard future energy security through our ongoing effective cooperation. The irreversible forces of globalization will continue to shape this energy transition.
“We have, through the Declaration of Cooperation, which has become a permanent feature on the global energy scene, established a new framework for producing countries, taking into account the strategic interests of consumer countries as well as the world economy.”
Minister of Petroleum Resources, Dr. Ibe Kachikwu urged OPEC countries to work hard and become least-cost oil producer, saying that if shale oil can produce and sell at $65 per barrel, there was absolutely no reason why Nigeria and other OPEC members’ country should be struggling.He said: “Shale is going to active. We know that whenever we are in excess of $65 per barrel, shale gets very active because the fundamentals become much more supportive to more investments and more production lines.”