Over the Weekend, the Price of Nigeria’s Bonny Light Crude Oil rose to $92.79 per barrel, up from $90.88 per barrel recorded just last Tuesday.
This increase is attributed to the Impact of Extended Output Cuts in the Global Oil Market.
Russia decided to extend its Voluntary Crude Oil Export cut by an Additional 300,000 barrels per day until December 2023, while Saudi Arabia extended its 1 million barrels per day Supply cut into October 2023 in a bid to bolster Price stability.
The Current Price of $92.79 per barrel is Notably the highest seen in 2023, Significantly surpassing the 2023 Budget Benchmark price of $75 per barrel by $17.79.
Goldman Sachs Commodities Research has also predicted that ongoing Oil Supply cuts could Push Oil Prices to reach $107 per barrel by 2024.
In light of these developments, Industry Experts have weighed in on the Situation.
Professor Omowumi Iledare, the Executive Director of Emmanuel Egbogah Foundation, highlighted Several Factors contributing to the rising Crude Oil Prices.
These include growing demand, supply challenges driven by Geopolitics, low Inventory levels in the United States, and a lack of Robust reserve replacement, which poses Future Supply Risks.
As a result, he Expects Oil Prices to continue rising.
Similarly, Professor Felix Amieyeofori, the lead Promoter of EnergyHub Nigeria, emphasized that the Shift towards renewable Energy sources Globally is Attracting more Investment than Oil.
Additionally, low Investment and Production, as well as reduced Exports, are likely to Impact Oil Prices.
Unless unforeseen Events occur, he Anticipates a significant Increase in Oil Prices.
Consumers can also anticipate higher Petrol Prices, as Refiners, who are currently paying more for Crude Oil, may pass on the Increased Costs in the form of higher Fuel Prices.
Furthermore, OPEC has Identified Nigeria as the least Refining member, with an Average equivalent of just 10,600 barrels per day (bpd) over the past five years.
This low refining Capacity contributes to Nigeria’s Dependence on Imported Petroleum Products.
Despite some Market uncertainties, Fuel lifting continues at Depots in Lagos, such as Ijegun and Satellite Town, while many Filling Stations remain closed to Motorists and Consumers.
