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Oil skyrockets to $71 per barrel, highest in 14 months

  • Excess crude earnings hit $43.2m in one day


  • Nigeria’s budget surplus rises by $24 per barrel


Crude oil, Nigeria’s biggest revenue earner, hit $71.38 per barrel yesterday, being the highest point in 14 months.


This new price, which  pushed Nigeria’s excess crude earnings on 1.8 million barrels output to OPEC market to $43.2 million in  one day, worsened the forecast for high price of refined petroleum product for the country, which depends largely on import to service its local fuel market.


The country, which depends largely on proceeds from crude oil to service over 85 per cent of its budget, benchmarked $45 per barrel for oil in its 2021 budget. Brent crude, however, traded for as high as $71.38 a  barrel in early Asian trade, the highest since January 8, 2020, and was at $71.11 a barrel by 0255 GMT, up $1.75, or 2.5 per cent. With the new price, Nigeria recorded a budget surplus of about $24 per barrel at a corresponding trade on Monday.


This amounted to about $43.2 million on 1.8 million cumulative output from the country in one day. Brent and WTI prices are up for the fourth consecutive session after Organisation of Petroleum Exporting Countries (OPEC) and its allies decided to keep production cuts largely unchanged in April.


Oil-linked stocks were trading actively on the BSE yesterday, as Brent crude futures surged above $70 a barrel for the first time since COVID-19 began, following reports of attacks by Yemen’s Houthi forces on Saudi Arabian facilities. Nigeria has surged its oil production by 2.8 million barrels in February even as other members of OPEC trimmed 870,000 barrels daily off their February output.


These revelations made by data compiled and released by Reuters on Sunday showed that the Africa’s biggest crude oil exporter was among countries pumping more. “Nigeria posted the biggest gain of 100,000 bpd after exports of Qua Iboe, one of its largest production streams, recovered,” Reuters reported.


It, however, stated that OPEC oil output fell in February as a voluntary cut by Saudi Arabia added to agreed reductions under a pact with allies, a Reuters survey found, ending a run of seven consecutive monthly increases.


The 13-member OPEC pumped 24.89 million barrels per day (bpd) in February, the survey found, down 870,000 bpd from January.


This is the first monthly decline since June 2020. OPEC and allies, known as OPEC+, decided to keep supply mostly steady for February while Saudi Arabia made an extra cut out of concern about a slow recovery in demand. With oil rising to a 13-month high last week, OPEC+ is set to discuss pumping more at a meeting on Thursday.


“So far, the members of the alliance have been cooperating and implementing the cuts in exemplary fashion,” said analyst, Eugen Weinberg, at Commerzbank. “We believe that the high prices will prompt OPEC+ to step up its production by 500,000 barrels per day, while at the same time withdrawing Saudi Arabia’s additional production cut,” Weinberg added.


Top exporter, Saudi Arabia, pledged an additional one million bpd output cut for February and March to ensure inventories do not build up. Riyadh achieved about 850,000 bpd of that reduction in February, the survey found. Consultants, including PetroLogistics, which tracks tanker shipments, said Saudi exports remained higher than expected last month.


The Saudi move means OPEC is pumping much less than called for under the OPEC+ deal – the supplier group’s pact with non- OPEC producers. Compliance with pledged cuts in February was 121 per cent, the survey found, up from 103 per cent in January. Iran, which is exempt from OPEC cuts and hoping to raise exports if U.S. sanctions are eased, also supplied less crude in February as a surge in exports appeared to run out of steam.


Nonetheless, its exports and production remained higher than many months of 2020. Angola scheduled fewer cargoes for export in February and Libyan output also declined after a port strike disrupted shipments.


Among countries pumping more, Nigeria posted the biggest gain of 100,000 bpd after exports of Qua Iboe, one of its largest production streams, recovered. Venezuela, contending with both U.S. sanctions and a long-term decline in output, also posted a rise in supply




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