…as excess revenue surges to $4.29 per barrel
By Anthony Okafor
The price of Bonny Light, Nigeria’s premium oil grade has risen from $62.50 to $64.29 per barrel in the global market as the Organisation of Petroleum Exporting Countries, OPEC, continued to withdraw excess oil from the market.
The prices of other crudes – Brent, West Texas Intermediate, WTI and OPEC Basket – also surged from $62.29, $52.90 and $59.00 to $63.29, $53.99 and $60.88 respectively.
Consequently, the nation’s excess oil revenue has risen from $2.50 to $4.29 per barrel.
However, OPEC has expressed optimism that the volatile oil market would witness much stability in the coming months.
Speaking at the RBC Energy Conference, 5 June 2019, New York, U.S.A, HE Mohammad Sanusi Barkindo, OPEC Secretary General, said: “Over the past 30 months or so OPEC, along with its non-OPEC partners in the ‘Declaration of Cooperation’, have continually demonstrated our utmost commitment to do whatever it takes to balance and stabilize the oil market, in the interest
rates of both producers and consumers.
“We have delivered on this promise, with the effectiveness of our joint efforts well-proven since the ‘Declaration of Cooperation’ began in January 2017. We have been agile and flexible with the partners adapting course depending on market conditions. When the market appeared skewed to oversupply, voluntary production adjustments were adopted and implemented, as was the case in December 2016 and December 2018, and equally, when concerns regarding demand outpacing supply surfaced as the market tightened, as was the case in June 2018, partners in the ‘Declaration’ took appropriate action.
“The ‘Declaration’ has had a transformational impact on the global oil industry and has received the backing of other producers, as well as consumers. This commitment to a balanced market and a sustainable stability remains our key objective. And an agile and flexible approach will also be central to how we proceed in the months ahead.
“We will not be swayed by exogenous factors; we have our eyes fixed firmly on our objectives. As we stated at the recent Joint Ministerial Monitoring Committee (JMMC) in Jeddah we remain unyielding in looking to further bring down inventory levels, help return investment to the industry, and maintain a healthy supply and demand balance, without under or over-shooting. When the next OPEC Ministerial Conference, and the OPEC and non-OPEC Ministerial Meeting, convene in the coming weeks, which I can assure you we will, it will once again underscore that all countries remain resolute in continuing to deliver on this commitment for the remainder of 2019 and beyond.”
He added: “We also recognize the fact that underlying risks remain. We are closely monitoring oil market developments, which have seen a high level of volatility in recent weeks, with major challenges and uncertainties related to ongoing trade negotiations, monetary policy developments, as well as geopolitical issues.
“The economic bearishness has led to many institutions revising down their expectations for the global economy and consequently oil demand growth. As you all know, there has also been a significant change in market sentiment, in both equity and financial markets, as attention is increasingly being focused on the Federal Reserve and the trade negotiations.
“This will all play into our calculations in the upcoming ministerial meetings. We always take a very measured approach through the ‘Declaration of Cooperation’ – we look at the market outlook, we listen to consumers and other stakeholders, and I assure you that we are focused on the interests of the global economy. OPEC has a vested interest in the continued growth and stability of the US and by extension the global economy.”