August 8, 2022

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Oil price rises $115.9 a barrel

After a bearish outing last week, oil price yesterday began the week on a positive note with the Brent Crude rising to $115.9 a barrel yesterday after trading mostly around $105 last week and the West Texas Intermediate (WTI) rising to $109 per barrel after trading at $102 per barrel for the greater part of last week.

Meanwhile, as the reality of projections for a surplus oil market this year fades out, analysts are hoping that if Nigeria manages to reach its production quota by the end of August when the OPEC+ quotas have been fully rolled back, it would go a long way to adding to the market surplus that the OPEC+ group envisages.

At the moment, the country’s inability to meet its production quota has been an issue for the OPEC+ projection. Nigeria has seen its production decrease in May instead of increase per the quota, recording a 500, 000 bpd shortfall in its actual production compared to its allocated quota by OPEC

At present, the OPEC+ group now sees the oil market surplus at one million barrels per day (bpd) this year, cutting down on its earlier estimate of 1.4 million bpd, according to Reuters.

The lowering of crude oil surplus projections comes as the OPEC+ group continues to produce under its quota.

OPEC+ agreed to increase its production in May by 432,000 bpd. The group was unable to reach this target, undershooting it by 2.7 million bpd. For June, the OPEC+ group again agreed to lift its production by another 432,000 bpd, but the general consensus in the industry is that they will be unable to meet that quota too.At present, the OPEC+ group now sees the oil market surplus at one million barrels per day (bpd) this year, cutting down on its earlier estimate of 1.4 million bpd, according to Reuters.

The lowering of crude oil surplus projections comes as the OPEC+ group continues to produce under its quota.

OPEC+ agreed to increase its production in May by 432,000 bpd. The group was unable to reach this target, undershooting it by 2.7 million bpd. For June, the OPEC+ group again agreed to lift its production by another 432,000 bpd, but the general consensus in the industry is that they will be unable to meet that quota too.

For July and August, the OPEC+ group got even more ambitious, raising their output targets by an even greater extent, essentially rolling the September increase that they had planned into July and August. But OPEC+’s continued underproduction will shrink any anticipated market surplus, if indeed OPEC+ is using these production figures in their estimates.

The Nation online

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