The price of Nigeria’s Bonny Light has risen to 92.79 per barrel, from $90.88 per barrel, recorded last Tuesday.
The price rose over the weekend which may been caused by the impact of extended output cuts that hit the market.
According to reports, Russia extended its voluntary crude oil export cut by 300,000 barrels daily until December 2023, while Saudi Arabia extended its 1 million daily supply cut into October 2023 to boost price stability.
The price, which is the highest in 2023, showed an excess of $17.79 per barrel against the 2023 budget benchmark price of $75.
Last Saturday, Goldman Sachs Commodities Research predicted that oil supply cuts could lead to oil prices hitting $107 a barrel in 2024.
An oil sector, Prof. Omowumi Iledare reacting to the development, noted that Nigerians and others should expect prices to rise further, especially as oil inventories have reduced drastically in the United States.
Iledare who is the Executive Director of Emmanuel Egbogah Foundation, stated: “Certainly, rising crude price is expected even though it may not be exactly $100 per barrel in the short run for some reasons. First, it will continue to rise because demand is growing.
“Second, supply is declining because of geopolitics and inventory becoming low in the US. Interestingly too, reserves replacement is low, thus placing future supply at risk. Price, therefore will continue to inch up.”
On his part, Prof. Felix Amieyeofori, who is the lead promoter, of EnergyHub Nigeria, said: “It is very possible that oil prices will cross the $100 per barrel level. First, the renewable sector is attracting more investment than oil globally. Some economies, including Saudi Arabia, have keyed into the global quest for a cleaner environment. Second, low investment, low production, and exports would continue to impact the market in terms of price. Except, if something happens, we will likely witness a significant increase in price.”
He also pointed out that consumers would have to pay more for petrol as refiners; currently paying more for crude oil stands to transfer the cost in the form of high fuel prices.
Already, OPEC has identified Nigeria, as the least refining member with an average equivalent of 10,600 barrels per day, bpd in five years.
OPEC, in its annual Statistical Bulletin 2023, revealed that the nation refined an equivalent of 33,000 bpd, 8,000 bpd, 1,000 bpd, 5,000 bpd and 6,000 bpd in 2018, 2019, 2020, 2021 and 2022, respectively.
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