The oil price rebound, yesterday, reached a significant point, selling at $60 per barrel, as the Organisation of Petroleum Exporting Countries, OPEC, continue to withdraw excess oil from the international market.
Prices of Brent, West Texas Intermediate, WTI, and OPEC Basket of 14 crudes stood at $60.00, $59.91 and $56.11 per barrel respectively.
Further check by Vanguard showed that the development came, mainly as a result of the ability of OPEC to mobilise its members and others not to pump excess oil into the volatile market.
But a source from OPEC, who preferred not to be quoted, said the market was still covered with an air of uncertainty, meaning that many factors can still compel price to leap further or drop, even beyond expectation.
The Secretary General of OPEC, Dr. Muhammad Barkindo, while speaking in Angola a few days ago, said: “OPEC knew it had to act in the face of this potential calamity. Throughout 2016, extensive consultations were undertaken with our non-OPEC partners, aimed at building consensus about the strategic urgency of rebalancing the global oil market in a collective manner.
“Twenty-four (now twenty-five) oil producing nations agreed at the first OPEC and non-OPEC Ministerial Meeting held on the 10th of December 2016 in Vienna, on a concerted effort to accelerate the stabilization of the global oil market through voluntary adjustments in total production of around 1.8 million barrels per day.
“What would become clearer in time is that one of the greatest inherent strengths of the ‘Declaration of Cooperation’ (DoC) was its flexibility, grounded on the core principles of equity, fairness and transparency. Over the last two years, the partners have been able to modify course depending on conditions in the market. When the market appeared skewed to oversupply, we have reacted accordingly, and equally, when consumers expressed concerns regarding demand outpacing supply, the partners in the DoC have taken appropriate action.” The rebound in oil price since last week may have shored up confidence in the 2019 Budget estimates which placed the oil price dependent revenue at $60/per barrel.
During the presentation of the budget proposals to the National Assembly last month, President Mohammadu Buhari had stated: “Notwithstanding the recent softening in international oil prices, the considered view of most reputable analysts is that the downward trend in oil prices in recent months is not necessarily reflective of the outlook for 2019.
“However, as a responsible Administration, we will continue to monitor the situation and will respond to any changes in the international oil price outlook for 2019. With regard to oil production, I have directed the NPPC to take all possible measures to achieve the targeted oil production of 2.3 million barrels per day.”