Nigeria’s Brent crude price will increase by between $2 and $3 per barrel in the coming weeks, on the back of stable demand and low volatilities, a report by the global oil research firm S&P Global Platts, has predicted.
This implies that crude oil price, which stood at $48.27 per barrel, last week, would increase to $51 per barrel or more, signalling a good omen for Nigeria, which depends on crude oil for its fiscal responsibilities.
Brent crude was $48.27 per barrel last week, down $1.85, or 3.7 percent, from its $50 per barrel price.
According to Platts, Nigeria will experience a slight surge in price of Brent crude, despite the recent increase in supply of crude oil globally, a development, which has threatened cut in oil production introduced by the Organisation of Petroleum Exporting Countries(OPEC) for its members.
Platts said the decision of the United States to increase its light crude and gasoline stockpiles has stoked fears that the global oil glut would remain unabated.
The report said: “Overall, stable demand and low volatility are the factors that should push Brent prices up by $2 or $3 in the coming weeks. Oil tumbled to its lowest in five weeks as an unexpected increase in U.S. crude and gasoline stockpiles stoked fears that the global supply glut will remain unabated.”
The oil research firm noted that the considerable drop in Brent futures prices, soon after the OPEC’s meeting in May 25, this year, was mainly caused by an extension of the production cuts, and high level of speculation in the market.
It said the International Energy Agency has recently published a forecast, stating that the global refinery is expected to go up by 2.7 million b/d between July and August with refineries processing almost 82 million b/d for the same period.
Quoting a report from the United States-based International Energy Agency (EIA), Platts said U.S drillers have added rigs for 20 straight weeks, the longest streak in at least three decades to increase production.
It added that the agency has published a forecast stating that the global refinery throughput is expected to go up by 2.7 million b/d between July and August, with refineries processing almost 82 million b/d for the same period.
A Market Research Manager, Tradition Energy in Stamford, Gene McGillian, said in the report that fears of oversupplywas driving the market, adding that crude oil price would appreciate soon.
