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Thu, Mar

Oil Price Slides To $53.82 As OPEC, Struggle To Stabilize Market

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The crude oil price has crashed from $57.00 to $53.82 in the international market as the Organization of Petroleum Exporting Countries, (OPEC) and others struggle to achieve stability.

A survey of the market by economic experts showed that the price of Brent, WTI, and OPEC basket yesterday, 22nd December 2018 stood at $53.00, $45.49 and $53.92 per barrel respectively. The market situation was attributed to over-supply from major oil producers and exporters that are not involved in OPEC, Non-OPEC oil cut accord.

The development is expected to impact negatively on Nigeria’s 2019 budget which has already adopted $60 per barrel as its benchmark. A renowned energy analyst, Mr. Bala Zaka said in a telephone interview with Vanguard said that the Federal Government was too ambitious to emerge with the $60 per barrel benchmark for the 2018 budget.

He said: “I expected the government to go below $50 because from the way things are going, the price of oil may not go beyond $70 per barrel next year. “Consequently, the proposed $60 is not realistic. It is good for us to have surplus than deficit in the course of budgeting. This is mainly because deficit brings stress and unnecessary panic. But there is always no harm to have surplus.”

In his recent presentation – OPEC and its role in oil market stabilization – sent to Vanguard, OPEC Secretary General, HE Mohammad Sanusi Barkindo, disclosed that to stabilize the volatile market “Twenty-four (now twenty–five) oil producing nations agreed at the first OPEC and non-OPEC Ministerial Meeting held on the 10th of December 2016 in Vienna, on a concerted effort to accelerate the stabilization of the global oil market through voluntary adjustments in total production of around 1.8 million barrels per day.

Following extensive analysis and deliberations on the immediate oil market prospects and, in view of a growing imbalance between global oil supply and demand in 2019, the partners decided to adjust the overall production by a combined 1.2 mb/d, effective as of January 2019 for an initial period of six months.

“If I was to use a single word to describe the impact of this cooperation on the oil market, it would be: transformative. It added: “Bringing together 25 sovereign producing nations is unparalleled in the history of the oil industry.

The enhanced relations between participating countries now constitute a fundamental and essential feature of the ‘new world of energy.’ Partners He said: “Throughout this entire process, the partners have solicited and responded to the views and concerns of producers and consumers. We have championed consumer and producer dialogue, benefiting from the tremendous partnership with the IEF. OPEC’s energy dialogues with the EU, Russia, China, India and independent suppliers have further harnessed information exchange and fed into our joint strategies.

The partners have been responsible and responsive; proactive and professional; adroit and adaptive.” Related Experts disagree on $60/b benchmark for budget 2019.

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