The Nation Newspaper

Tag: Oil price

  • Oil price stability raises hope for budget

    The relative stability in the prices of crude may have allayed fears over how the Federal Government will get the cash to fund this year’s N8.3trillion budget, it was learnt at the weekend.

    Prices of crude have hovered between $61.17 and $62.29, a development, which suggested that the country has made extra $2.90 above the $60 benchmark of the budget.

    Former Managing Director, Nigerian Liquefied and Natural Gas (NLNG) Limited,  Mr Godswill Ihetu, said the development suggests that the country would not have problems meeting its budgetary benchmark of $60 per barrel, in the event that prices of oil continue to rise in the international market.

    He said the situation is better, following slight recovery enjoyed by prices of  oil in recent times, adding that it would have been terrible, if the prices had fallen below the $60 budget benchmark.

    Ihetu, who spoke in a telephone interview, said the Organisation of Petroleum Exporting Countries (OPEC) hopes to achieve stability in the production and prices of crude oil this year, as contained in the latest edition of its market reports.

    He said it is a good development for OPEC members, especially Nigeria, which relies on crude oil exports to sustain its economy.

    He said the country would not find it difficult increasing oil production once internal issues are dealt with.

    ‘’What Nigeria wants are increased exploration and production of crude; favourable price mechanism and demand for the product. Once these happen, financing budgetary allocation would not be a problem. The country needs good price, which is looking up relative to the situations in the global oil market,’’ he said.

    It would be recalled that the Minister of States for Petroleum Resources, Dr Ibe Kachikwu, said the country’s crude oil production is expected to increase from current average of 2 million barrels per day to 2.5million   barrels per day by the end of 2019. He also said that the country intends to further grow crude oil production to 3 million by 2020. According to him, the county’s crude oil reserves are expected to hit 40billion barrels by 2020 raising its from current 37.2 billion barrels.

    Similarly, OPEC is targeting global oil to rise to 1.29million barrels per day. Based on this, total oil demand is projected to reach 100.08 million b  arrels per day for 2019.

  • Oil prices drop to $83

    Oil price, yesterday, dropped  to around $83 a barrel on  pressured by expectations that some Iranian oil exports will keep flowing after the U.S. reimposes sanctions, easing a strain on supplies.

    Brent crude, the international benchmark was down $1.07 to $83.09 per barrel at 0817 GMT. It hit a four-year high of $86.74 last week.

    Similarly, U.S. crude CLc1 was down 93 cents at $73.41.

    Two companies in India, a big buyer of Iranian oil, have ordered barrels in November, India’s oil minister said on yesterday.

    However, Trump administration is considering waivers on the proposed sanction on Iran, a U.S. government official has said.

    According to U.S officials, pressure  has mounted on United States government to consider waiver for on Iran ahead of plans to sanction Iran on November 4, this year.

  • Oil price hits $81.69 per barrel

    Oil price, yesterday, reached $81.69 per barrel; suggesting that the price may reach $82 per barrel soon in the event that the price continues its upward movement.

    This followed allegation by United States President, Donald Trump that Organisation of Petroleum Exporting Countries (OPEC), is behind the rise in price of crude for its member state, amid sanctions on Iran by US.

    The report said the decision by U.S to sanction Iran has sent the oil prices higher, adding that the price would increase further if US refused to lift the sanction.

    Oil prices may remain in the bull domain amid concern that U.S sanctions on Iranian crude of exports will result in much tighter market conditions, when it takes place in November.

    Citing Stephen Lines Brokerage, it said OPEC is expecting the decline in Iran exports to reach 1.4 million barrels per day,if the sanctions continues.

  • Oil rises as U.S. renew sanctions against Iran

    Oil prices rose on Tuesday as the U.S. reintroduced sanctions against major crude exporter, Iran, tightening global markets.

    Meanwhile,  heatwave across Europe and other areas pushes oil up.

    Sweet Brent crude oil futures were at 74.08  dollars per barrel.

    U.S. West Texas Intermediate (WTI) crude futures were up at 69.21 dollars a barrel.

    The U.S. sanctions against Iran, which shipped out almost three million barrels per day (bpd) of crude in July, officially came into effect at 12.01 a.m. U.S. Eastern time (04.01 GMT) on Tuesday.

    Many countries, including U.S. allies in Europe as well as China and India, oppose the sanctions, but the U.S. government said it wants as many countries as possible to stop buying Iranian oil.

    “It is our policy to get as many countries to zero as quickly as possible.

    “’We are going to work with individual countries on a case-by-case basis, but our goal is to reduce the amount of revenue and hard currency going into Iran,” said a senior U.S. administration official on Monday.

    French bank Societe Generale said there was currently a “comfortable supply” in physical crude markets, but noted, “Iran sanctions will take another one million bpd off the markets.”

    This would leave markets with a little spare capacity to deal with unforeseen disruptions, it said.

    Some analysts warned that a global heat wave could also now affect oil demand.

    Much of the northern hemisphere has been gripped by extreme heat this summer, pushing up demand for industrial and residential cooling.

    This mostly impacts demand for power fuels such as thermal coal and natural gas. (ReutersNAN)

  • Oil price to be stable into 2019 as OPEC, U.S. meet supply needs

    Oil prices are likely to be stable this year and next as increased outputs from OPEC and the United States meet growing demand led by Asia and helps to offset supply disruptions from Iran and elsewhere, a Reuters poll has shown.

    A survey of 44 economists and analysts forecast Brent crude to average $72.87 a barrel in 2018, 29 cents higher than the $72.58 projected in the previous month’s poll and above the $71.68 average so far this year.

    U.S. crude futures were seen averaging $67.32 a barrel in 2018, compared with $66.79 forecast last month and an average of $66.16 until now.

    This is the 10th consecutive month in which analysts have raised their oil price forecasts.

    “We expect prices will largely remain range-bound in the second half of 2018 and 2019. On the one hand, robust U.S. shale production and market concerns over the brewing U.S.-China trade war will help keep a lid on prices,” said Cailin Birch, an analyst at the Economist Intelligence Unit.

    “On the other hand, the recent decline in global stocks will make prices more sensitive to any geopolitical risk, which will keep prices from falling significantly below current levels.”

    The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries agreed to raise supply in a meeting last month to meet rising global demand, but the group did not specify a clear target for the output increase.

    Meanwhile, U.S. sanctions on Iran that will come into force later this year will force a decline in exports and help support prices, analysts said.

    “The disruption to Iranian barrels will weigh on oil markets in the second half of 2018 and H1 2019 as there are few spare barrels in the market that can offset a big disruption to Iranian supplies,” said Emirates NBD commodities analyst Edward Bell.

  • Oil price hits four-year high at $76

    Reduced global supply— combined with the solid global economy—have helped push oil prices higher since they fell below $30 a barrel in early 2016.

    The rising tide has lifted the price of the international benchmark, Brent crude, above $76.

    Benchmark prices for American crude oil cracked $70 a barrel yesterday, the first time they have climbed that high since 2014. This is coming as investors see the prospect of President Trump pulling the United States (U.S) out of an international agreement that eased sanctions on Iran in exchange for restrictions on its nuclear programme.

    In recent months, oil prices have risen to levels not seen in  about four years, reflecting a steady, albeit volatile, ascent to a fresh peak, after a global glut of crude sent energy markets into a tailspin in 2014. The recent rally comes amid the possible reinstatement of sanctions on Iran; however, a number of factors have fueled U.S. benchmark oil’s march to a perch above $70 a barrel.

    The Organisation of the Petroleum Exporting Countries (OPECs’) efforts since the start of last year to curb global production have had the biggest influence on crude values, along with growing demand for oil and Venezuela’s output woes.

    In yesterday’s trading, West Texas Intermediate crude for June delivery CLM8, +1.43 per cent was up 81 cents, or 1.2 per cent, at $70.53 a barrel on the New York Mercantile Exchange, after tapping a high of $70.76. Prices, based on the front-month contracts, haven’t reached or settled at levels this high since late November 2014.

    Four key reasons for the rally in oil prices include the OPEC-non-OPEC crude-oil production curbs.

    “The number one reason is the OPEC/non-OPEC accord led by the Saudis and Russians to limit production and lower the exceptionally-high petroleum stocks at the time of the agreement,” said James Williams, energy economist at WTRG Economics

    Under the deal, which was implemented at the start of last year and runs through the end of this year, OPEC and other major oil producers, including Russia, agreed to cut crude production by roughly 1.8 million barrels a day from late 2016 levels in an effort to eliminate a longstanding glut of global supplies.

  • Oil prices rise on Middle East tensions, healthy demand

    Oil prices rose on Wednesday, supported by tensions in the Middle East and healthy global demand, although rising United States output from the United States continued to weigh on markets.

    Brent sweet crude futures were at 67.66 dollars per barrel.

    U.S. West Texas Intermediate ( WTI ) crude futures were at 63.82 dollars a barrel at 0027 GMT, up 28 cents, or 0.4 per cent, from their previous close.

    Saudi Arabia’s Crown Prince Mohammed bin Salman arrived in Washington for a state visit, raising market-speculation the United States could re-impose sanctions on Iran, following renewed-criticism of the 2015 nuclear-deal.

    Energy consultancy FGE said it was likely that the United States would re-impose sanctions on Iran soon, resulting in a 250,000 to 500,000 barrels per day ( bpd ) drop in its exports by year-end.

    Analysts also pointed to healthy economic growth and a weak dollar as oil price drivers.

    In a sign of healthy demand, U.S. crude stocks fell by 2.7 million barrels in the week ended March 16 to 425.3 million, as refineries boosted output, the American Petroleum Institute said on Tuesday.

    Reuters/NAN

  • Oil price slips below $65/bbl

    Oil price continued its fall for a fifth day as surging U.S. output and a rising dollar sent crude to its biggest drop in two months.

    Futures fell as much as one  per cent in New York after Department of Energy data showed U.S. crude production jumped to a record 10.25 million barrels a day last week. The global Brent benchmark slipped below $65 for the first time since late December.

    The U.S. continues to be the biggest obstacle to the Organisation of Petroleum Exporting Countries (OPEC) efforts to stem a global oversupply. American crude production has now eclipsed Saudi Arabia’s output, and Citigroup Inc. expects it to breach 11 million barrels a day by the end of summer, several months earlier than the U.S. government’s own forecast. A rising dollar in recent days has also weighed on prices.

    “Supply looks quite healthy and that’s taking the edge off oil prices,” said Nitesh Shah, a commodities analyst at ETF Securities in London. “A few of the catalysts that held up prices in January are fading away.” Rising U.S. supplies and rig counts have added to the dollar’s pressure on prices, he said.

    West Texas Intermediate for March delivery fell 45 cents to $61.34 a barrel on the New York Mercantile Exchange.  The grade suffered its biggest drop in two months on Wednesday after the publication of U.S. inventory data. Prices are heading toward their longest stretch of declines since April.

  • Govt wants oil price at $60

    Govt wants oil price at $60

    The Federal Government would be happy to see that the price of petrol stays at  $60 per barrel, and not $70 per barrel, and not $70 per barrel, which the price of crude recorded at the international market earlier.

    The Minister of State for Petroleum Resources, Dr Emmanuel Ibe Kachikwu, said the country is aiming to achieve oil production of 1.8 million barrels daily by March and will prefer oil prices to stay in the $60 range.

    He told an oil and gas newspaper that the government would be glad to see the price moderated at $60 per barrel, to grow oil production above 1.8million barrels per day(bpd)

    “Hopefully the price of oil will help us a bit to get some of the pressure off our back. If the infrastructure comes back, our potential to increase will be there. We have taken the OPEC position  of staying at 1.8 million barrels per day and not allow that sort of squeeze to loosen up. I would  wait till June [to see how] the numbers are looking,” said Kachikwu in Abu Dhabi.

    The production is still below 1.8 million barrels per day and condensates production is 300,000 barrels, he added. When asked whether $70 oil prices are helpful to Nigeria, he said the resolve was to have a reasonable figure.

    “Not $70, somewhere in the sixties. There is a collective resolve to do everything. The philosophy is not to protect the price but the business model,” he said.

     

  • Oil prices hit $65

    Oil prices hit $65

    Brent crude oil prices jumped above $65 per barrel after the shut-down of the Forties North Sea pipeline knocked out significant supplies.

    Brent crude, the international benchmark for crude oil, traded at $65.24 a barrel.

    The last time oil prices reached this point was in June 2015 when it traded at $65.49.

    United States West Texas Intermediate (WTI) crude futures rose to $58.21 a barrel on Wednesday.

    Britain’s Forties oil pipeline, the country’s largest at a capacity of 450,000 barrels per day (bpd), stopped production on Monday after cracks were revealed.

    “The market reaction shows that in a tight market, any supply issue will quickly be reflected in higher prices,” said ANZ bank.

    The jump in Brent prices widened its premium to WTI prices, making U.S oil exports more attractive. The Organisation of Petroleum Exporting Countries (OPEC) had agreed on an output production cut to reduce the supply glut which led to a decline in oil prices.

    Nigeria and Libya were exempted from the cuts due to crisis in the Niger Delta but the two countries are now signalling their intention to raise output next year.

    While several ministers at the November 30 meeting of OPEC suggested the two nations had joined the output-curbing deal, both are working to add to their peak production from 2018.