There seems to be hope on the horizon as the brent oil price is expected to average $53 in 2021, according to Fitch Solutions Country Risk & Industry Research’s latest oil price report.
Fitch Solutions also expects 2021 global fuel demand to grow by 4.6 million barrels per day after falling by 7.1 million barrels per day in 2020 as the global economy continues to recover with transport and commerce returning closer to historic pre-pandemic levels.
This is a piece of good news for Nigeria, after reporting N1.52 trillion oil revenue in 2020, the lowest in recent years.
Also, the Federal government in the 2021 budget had estimated oil price at $40 per barrel to fund its expenditure.
Already, Brent oil topped $55 a barrel last week for the first time since February 2020, as gains in broader markets added to investor optimism already buoyed by Saudi Arabia’s unilateral plan to cut output.
“Our view remains that the market will continue to rebalance in 2021, driving a continued the drawdown of global inventories and further gains in prices,” Fitch Solutions analysts stated in the report.
“In light of the muted recovery in demand, large-scale supply-side adjustments will be needed in order to rebalance the market and work off swollen global crude inventories,” said Fitch Solutions.
“Sharp CAPEX reductions are driving declines in non-OPEC supply, led by significant losses in the US shale patch. However, we expect shale production will return to growth in 2022, albeit at a reduced rate,” it said.
The Organization of the Petroleum Exporting Countries (OPEC) also said it expects a growing demand for energy due to the global roll-out of Covid-19 vaccines and will determine the price on a monthly basis.
Join the conversation
Support Ripples Nigeria, hold up solutions journalism
Balanced, fearless journalism driven by data comes at huge financial costs.
If you are motivated and passionate about building a global society, founded on justice, equity, fairness, transparency, accountability and superior knowledge, kindly consider donating to Ripples Nigeria’s solutions journalism.
Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.
INVESTIGATION: Inside UNILAG’s multi-million naira budgetary abuse and academic discord
The University of Lagos located in Nigeria’s commercial capital, Lagos, has been embroiled in controversies with allegations bothering on misappropriation of...
SPECIAL REPORT: Displaced residents of Zamfara battle hunger, as underfunding derails Nigeria’s nutrition goals
On paper, Muhammad Zayyanu is seven years old. The quiet boy who looks shorter for his age could not recollect...
INVESTIGATION: N7.3bn paid for unnamed projects; how Nigerian govt spent N2.2trn in six months
Analysing nearly 3,000 payments made by various Federal Government Ministries, Departments and Agencies (MDAs) over the previous six months (January...
INVESTIGATION… Delay rocks Nigerian govt’s promise of N30,000 covid-19 relief for artisans, others
Before the outbreak of the COVID-19 pandemic in February, 2020, Chukwudi Okoroigwe’s daily earnings as a bus driver was hardly enough to cater to the...
INVESTIGATION… Ten years after, communities count losses as AfDB, Cross River govt abandon road project
Ten years after the Cross River State government and African Development Bank (AFDB) jointly awarded the Yahe-Wanokom-Wanikade-Benue border road for...