By Adedapo Adesanya
The Organization of the Petroleum Exporting Countries (OPEC) daily basket price increased to $44.29 per barrel on Tuesday from $43.03 per barrel on Monday.
According to OPEC Secretariat calculations released on Wednesday, the average rose $1.26 or 2.93 per cent spurred by latest updates from coronavirus vaccine trials which indicated that the tested candidates were able to generate immune responses.
Also known as the OPEC reference basket of crude oil, the OPEC basket, a weighted average of oil prices from different OPEC members around the world, is used as an important benchmark for crude oil prices.
The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
It was observed that the market received a boost yesterday following the agreement by European leaders to create a €750 billion ($858 billion) recovery fund to rebuild EU economies ravaged by the coronavirus crisis.
The deal will help businesses rebound from the pandemic, allow member countries to roll out new measures to reform their economies in the long run and help them protect against future crises.
In other OPEC related news, as the Middle East enters the hottest days of summer, Saudi Arabia is set to burn record amounts of crude oil to run its power plants and keep its citizens comfortably air-conditioned.
Due to the high energy demand, the government use crude or fuel oil in addition to the much cleaner natural gas that normally fires the plants. But this year, the urge to use oil is even stronger because of higher demand, with the coronavirus pandemic forcing many Saudis to cancel their summer holidays abroad.
Another difference is that record cuts to Saudi Arabia’s oil production since April, part of a push by OPEC members to prop up prices in the face of the virus, have reduced its supplies of gas, most of which come from the same wells as crude.
The extra oil going toward power may limit the price impact of OPEC’s plan to taper output restrictions from next month. The kingdom pumped 7.5 million barrels a day in June, the fewest since 2002 out of which it exported 5.7 million barrels daily while keeping most of the rest for domestic refineries.
Dipo Olowookere