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29
Fri, Mar

Oil Price Jump Above $58.17pb As OPEC And Non-OPEC Members Agrees To Production Cut

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Oil price in the world market had yesterday appreciated above $58.17 having all Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members accepted to cut their output. Accordingly, the price of Brent crude rose to $58.17 per barrel, making up to $2 above the previous day's price.

However, the Nigerian Bonny Light also rose to $56.95 as against $55.44 per barrel transacted on Tuesday this week; this indicates that the country has made an excess of $16.95 above the $40 per barrel benchmark price tied to the 2021 budget which was also pegged on 1.8million barrel per day output.

Although, OPEC revealed that it was not envisaging any rapid increase this year based on the global pandemic that hit the global economy, but may pick up by June based on the ability of stakeholders to confront the pandemic challenges.

The OPEC Secretary-General, Mohammed Sanusi Barkindo while commenting during the Declaration of Cooperation (DoC), convened by OPEC and non-OPEC members at the S&P Global Platt’s American Petrol and Energy Conference said: “Over the subsequent three years, from 2017-2019, the diligent, and coordinated response through voluntary production adjustment decisions taken by the DoC helped rebalance the market, restore stability and revive the industry.

He continued that, “When the year turned from 2019 to 2020, there was a great deal of optimism for the oil market in the coming 12 months, not only for the oil market but the global economy too.”

According to Mr. Barkindo, though the pandemic has hit all aspects of our economic lives following the widespread lockdown that throw economic activities into distress where many economic outlets were shut down, the oil and gas sector was not left out.

He further explained that the DoC had to again stand up and be counted. The action was needed, saying the activities they did with the longest production adjustments in the history of the OPEC, the DoC, as well as the oil industry, have all agreed o April 12, 2020, to help counter the decline in the oil demand if they should remain above-board since there was a tie the price crashed to as low as $20 pb. Therefore, the cut in the production has to be introduced and with full compliance, there is headway.

Meanwhile, expressing optimism for the year ending, the OPEC secretary said; “Nonetheless, we are cautiously optimistic for the global economic rebound in 2021, and for significant oil demand growth. But we will continue to take a month-by-month approach to assess market conditions, and stand ready to take any necessary actions through the DoC. In looking further ahead, oil market stability, and more broadly, energy market stability, will be vital to the energy transition.”

 

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