For the first time in 2021, the price of Bonny Light, Nigeria’s premium oil grade, has risen to $58.93 per barrel in the international oil market, thus increasing hope for the execution of the nation’s 2021 budget.
The budget was benchmarked on $40 per barrel, and 1.8 million barrels per day, mb/d.
However, the prices of other crudes, including Brent, the Organisation of Petroleum Exporting Countries, OPEC Basket and West Texas Intermediate, WTI, also leaped from over $50 to $59.34, $57.72 and $65.85 per barrel respectively.
According to traders at the London market, the bull was mainly fueled by the commitment of some nations, especially Kazakhstan and Iraq to the OPEC oil cut, targeted at achieving stability in the market.
In a statement by Vanguard, OPEC stated: “Kazakhstan continues to demonstrate its full support for the decisions taken at OPEC and non-OPEC Ministerial Meetings (ONOMM), most recently the 13th ONOMM on 4/5 January 2021.
“Over past months, Kazakhstan has taken steps to not only realize full conformity to its production adjustment, but also to compensate for overproduced volumes. Its commitment to this process will continue in the coming months, as all Participating Countries in the Declaration of Cooperation (DoC) strive for a balanced market and much needed sustainable stability.
“Kazakhstan offers its continued full support to the DoC, will take further steps to compensate for overproduced volumes, and underlines the importance of fairness and equitability in the DoC.”
It also added: “Iraq reiterates its commitment to adhering to full conformity and compensating for overproduced volumes in accordance with decisions taken at OPEC and non-OPEC Ministerial Meetings (ONOMM), most recently the 13th ONOMM on 4/5 January 2021. Iraq remains resolute in the core Declaration of Cooperation (DoC) objectives of rebalancing the market and achieving much needed sustainable stability. The attainment of 100% conformity from all Participating Countries, and compensating for overproduced volumes, is both fair and equitable to all participating countries in the DoC.”
In his 2021 budget address, President Muhammadu Buhari had stated: “9. In 2020, the average daily oil production was 1.88 mbpd up to June, as against the revised estimate of 1.80 mbpd for the entire year. However, the market price of Bonny Light crude averaged 40.79 US Dollars per barrel, significantly higher than the revised benchmark price of 28 US Dollars.”