By Adedapo Adesanya
The price of Brent rose by 45 cents to $89.00 per barrel on Monday on expectations that the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) would keep supplies tight.
This, rather than being a good development for Nigerians because of more revenue to be generated from the sale of crude oil, is a sad thing because the price of petrol will increase after the removal of fuel subsidy by the government.
Yesterday, the price of the US West Texas Intermediate crude (WTI) appreciated by 40 cents to $85.95 per barrel.
Saudi Arabia is widely expected to extend its voluntary 1 million barrel per day cut for a fourth consecutive month into October. Saudi Arabia’s previous announcements have come ahead of its official selling prices, which typically emerge in the first week of the month.
The kingdom has spearheaded efforts to support prices, making large voluntary output cuts as part of a production deal agreed by OPEC+.
The 23-man alliance agreed on a broad deal in early June to curtail supplies until the end of 2024. Saudi Arabia at the time announced the additional voluntary cut, which brought its oil production to a multi-year low of 9 million barrels per day.
Russia, another member of the group, has with OPEC+ partners on the parameters for continued export cuts in October.
Support came as August jobs data in the US strengthened expectations that the US Federal Reserve will pause its increases to interest rates this month.
In China, manufacturing activity expanded unexpectedly in August and a series of economic measures to support the country’s post-pandemic recovery have ignited optimism that demand will pick up in the world’s largest oil importer.
China has been tapped to help the market, but recent headwinds seen in its post-COVID-19 pandemic recovery have changed the course of the market.
Analysts noted that global crude oil supplies are expected to improve in the next six to eight weeks because of refinery maintenance.
