- Experts weigh in as oil prices edge higher
The Chief of Army Staff (COAS), Lt.Gen. Olufemi Oluyede, has declared that oil production must continue to go up at all cost in the interest of the country’s economy.
He said the only way to improve the economy was to ensure sustained increase in oil production.
Oluyede told troops and officers to sustain their clampdown on all forms of illegal oil operations carried out in the Niger Delta by oil thieves. He spoke when he visited the Headquarters of the 6 Division in Port Harcourt, Rivers State in the company of other senior officers. He said if the country failed to make money from oil, the dollar would continue to rise
Meanwhile, global oil prices inched upward yesterday, rebounding slightly from earlier losses as an optimistic market outlook offered support despite subdued trading ahead of the Christmas holiday.
Brent crude futures rose by 42 cents, or 0.6 per cent, settling at $73.05 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 38 cents, or 0.6 per cent, to reach $69.62 per barrel, according to Reuters.
Market analysts attributed the modest price gains to limited trading activity typical of the holiday season, with a stable short-term outlook.
“With reduced activity in the paper markets, participants are likely holding off until there is more clarity on 2024 and 2025 global oil balances,” FGE stated in a note.
The Army Chief, who participated in the decoration of 11 senior officers of the division with higher ranks, said if the dollars kept rising, everything would continue to be expensive in the country.
He told the troops not to obey any order that involved engaging in illegal activities and promised to improve the welfare of the troops.
Addressing the troops, he said: “There is no other way as it is now that the Dollar will come down if the government does not make money from oil because oil is the mainstay of the economy.
“So, if we are not making money from oil, the Dollars will keep on rising and that means food and everything will be expensive. Nigeria is our country. We do not have any other country, so we must make Nigeria work.
“Why I am here this afternoon is to charge you because we have been given the responsibility to safeguard all oil infrastructure in Niger Delta and that we must do well.
If anybody tells you to go and do anything illegal, tell them that the Chief of Army Staff said that you should not do it.
“In the next one month, I must find changes here. Oil production must go up at all cost. I have come to talk to you as your father and as your leader.
“Now, as your father I will beg you to do what is correct. Now, as your leader, if you do not do what is correct I will deal with you decisively.
“So, if you don’t want to be in soup, just go and do your work and do it well. Like I told you, I know this environment very well; I was the GOC here, so there is nothing you can tell me. So go tell your colleagues that this is my message”.
Gen Oluyede said he would work hard to ensure improvement in the welfare of the troops in the next one year to enable them discharge their duties without worries.
He said he had discussed the predicament of the army with President Bola Ahmed Tinubu particularly in the areas of accommodation and kitting.
But he insisted that the troops must work harder to improve oil production to enable the government to earn money to take care of their welfare.
He said: “In the next one month there must be a remarkable difference here. I have come to give you a directive and those directives must be followed so that Nigeria can be better.
“There is no other way to earn money for Nigeria. And let me tell you, I have told Mr President about our predicament in the Army. Talking about accommodation, kitting, whatever. Where is the government going to get the money if they do not have money from oil? No, tell me, where else will they get the money?
“Now, if you do your part, I will do my part. In the next few weeks you will see that things will start changing. Even Ration Cash Allowance (RCA) we are working on so that we can have something better for you. And the same thing we are going to do with kitting and accommodation.
“There will be massive accommodation for you so that you can have places to live with your families. But if we do not make the government earn money, where will they get money? There is no other way.
“So, my message to you is for you to go back and tell your colleagues. We must make things better here”
FGE in the note added that supply and demand dynamics in December have provided a less bearish perspective, though the market remains vulnerable to disruptions.
“Given how short the paper market is on positioning, any unforeseen supply disruption could trigger upward price spikes,” the analysts cautioned.
Neil Crosby, assistant vice president of oil analytics at Sparta Commodities, pointed to evolving views regarding long-term oil supply balances.
He cited the U.S. Energy Information Administration’s (EIA) latest short-term energy outlook, which predicts a draw in 2025 liquid balances despite anticipated increases in OPEC+ production.
“The consensus over 2025 liquid balances from major agencies is breaking down, indicating potential volatility,” Crosby remarked, suggesting this shift could reshape market trajectories in the coming months.
China, the world’s largest oil importer, added further optimism to the market with its announcement of a 3 trillion yuan ($411 billion) special Treasury bond issuance to boost its economy.
Analysts see this fiscal stimulus as a critical factor that could elevate energy demand in 2024.
“This move is likely to provide near-term support for WTI crude at around $67 per barrel,” Kelvin Wong, senior market analyst at OANDA, observed.
3
