Oil Market: Bonny Light price rises 3% to $87.64 per barrel on low output

The price of Nigeria’s Bonny Light, weekend, rose by three per cent to $87.64 per barrel, from $85 per barrel, due to low production by members of the Organisation of Petroleum Exporting Countries, OPEC.

Checks by Vanguard, yesterday, indicated that the prices of other crudes, including Brent and OPEC basket stood at $86.24 and $86.66 per barrel respectively.

This leap in price, apparently the highest since June 2023, showed an excess of $12.64 per barrel when juxtaposed against the $75 per barrel reference price of the nation’s 2023 budget that was also based on 1.69 million barrels per day.

But the Nigerians and other nationals would have to pay more for petrol, which is imported from the global market, especially because of the low value of the Naira, currently hovering at more than N700/$.

Commenting on the development, the National Operations Controller, Independent Petroleum Marketers Association of Nigeria, IPMAN, Mike Osatuyi, said: “This is a good development. The government will earn more revenue to fund its 2023 budget. The good thing is that it is no more involved in paying fuel subsidy. So, the revenue is mainly for the purpose of developing the nation.

“With the deregulation, the private investors have started to invest in the downstream sector, meaning that the government has taken the back seat. The individuals, households and businesses that are currently paying the full price of the product are adjusting. It is good for the nation’s economy.”

Checks by Vanguard indicated that the oil marketers have not been able to flood the domestic market with petrol as earlier envisaged, due to the challenge involved in sourcing foreign exchange.

However, OPEC said it has stepped up efforts with non-member states in order to achieve stability in the global market, adding that despite uncertainties much impact would be made in the coming months.

Rising from the 49th Meeting of the Joint Ministerial Monitoring Committee (JMMC), which took place via videoconference, Friday, OPEC, stated: “The JMMC reviewed the crude oil production data for the months of May and June 2023 and noted the overall conformity for participating OPEC and non-OPEC countries of the Declaration of Cooperation (DoC). The committee urged all participating countries to achieve full conformity and adhere to the compensation mechanism.

“The committee reaffirmed the commitment of its member countries to the DoC which extends to the end of 2024 as agreed in the 35th OPEC and non-OPEC Ministerial Meeting (ONOMM) on 4th of June 2023.

“It also noted to adjust of the frequency of the monthly meetings to become every two months for the JMMC and the authority of the JMMC to hold additional meetings, or to request an OPEC and non-OPEC Ministerial Meeting as agreed on in the 33rd OPEC and non-OPEC Ministerial Meeting (ONOMM) on 5th of October 2022.

“The committee will continue to closely assess market conditions noting the willingness of the DoC countries to address market developments and stand ready to take additional measures at any time, building on the strong cohesion of OPEC and participating non-OPEC oil-producing countries.

“The committee also expressed its full recognition and support for the efforts of the Kingdom of Saudi Arabia aimed at supporting the stability of the oil market and reiterated its appreciation for the Kingdom’s additional voluntary cut of 1 million barrels per day and for extending it for the month of September. The committee also acknowledged the Russian Federation for its additional voluntary reduction of exports by 300 kbd for the month of September.”