Oil prices fell on Thursday following the resolution by the Organisation of the Petroleum Exporting Countries (OPEC) and its Russia-led allies to relax record production curbs starting from next month, although the decline was tempered by contraction in worldwide storage as economic activities improve.
Nigeria’s chief crude grade, Bonny Light, posted its third gain in a row this week at the Wednesday session, adding 43 cents or 0.99% at $43.87 per barrel. Qua Iboe, another major national grade, equally advanced, gaining 50 cents or 1.15% at $43.96 a barrel.
Both Brent and WTI climbed up by 2% at the previous session following a slump in U.S crude stockpiles.
OPEC and its allies, jointly known by the tag: “OPEC+” sealed a pact on Wednesday to taper output cuts from the 9.7 million barrels per day (bpd) adopted since May to 7.7 million August through December.
“Things are getting back to normal on the oil market. The petro-nations announced the partial lifting of their production restrictions as oil demand rebounds and signs of an easing supply glut emerge… The economic recovery puts demand above supply,” Norbert Rucker, Head Economic Research at Julius Baer said.
Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman said supply cuts in August and September would ultimately come to 8.1 million to 8.3 million bpd, topping the headline number.
That is because nations in the grouping, which over-produced earlier this year would make up with additional cuts in August and September, he stated.
Oil prices are projected to remain arrested in as much as greater output from OPEC+ members will potentially be mopped up improving demand, said Tsutomu Kosuge, president of commodity research firm Marketedge Co.
“I expect Brent will stick to the tight range between $40.50-$46.50 for the next month or so,” Kosuge stated, further saying the escalating rift between China and the United States may impact market sentiment.
On Wednesday, Fatih Birol, Director of International Energy Agency, noted that global oil markets are slowly finding their balance back, with prices of around $40 per barrel envisaged in the months ahead.
- BREAKING: 288 new cases of COVID-19 take Nigeria’s total to 44,129; deaths now 896 - August 3, 2020
- School feeding programme gulped over N500m during COVID-19 lockdown —Minister - August 3, 2020
- ONDO: We didn’t substitute nominated candidates —INEC - August 3, 2020