By Udeme Akpan
THE price of Bonny Light, Nigeria’s premium oil grade has risen from $71.00 to $72.41 in the international market as the Organisation of Petroleum Exporting Countries, OPEC moves to eliminate excess supplies from the market.
The prices of other Brent, WTI and OPEC Basket rose from $70.00, $62.40 and $70.00 to $71.55, $63.89 and $70.41 respectively.
Meanwhile, OPEC has expressed hope for increased market stability in the coming months as it works with others, including producers and consumers.
Speaking recently at the African Petroleum Producers Organisation, APPO conference in Malabo, HE Mohammad Sanusi Barkindo, OPEC Secretary General, stated: “It took us around 18 months to assist the oil market in returning OECD inventory levels to the five-year average, which helped return balance to the market and reintroduced a long-absent element of stability. There is now far more optimism and confidence in our industry.
“Moreover, when we saw conformity levels to the voluntary production adjustments overshoot in the middle of 2018, we were agile and flexible enough to modify course and stay ahead of the curve. When the market has appeared skewed to oversupply, we reacted accordingly, and equally, when concerns were expressed regarding demand outpacing supply, the partners in the ‘Declaration’ took the appropriate action.
“It has had a positive impact on the global economy, and trade worldwide responded positively, helped by the stimulus provided through the ‘Declaration’. The financial markets, in general, and the financial oil market, in particular, have welcomed the forward guidance provided by the ‘Declaration’. It has given them a sense of understanding and security, and to avoid any crisis like that seen in 2008.
“It has also caused a significant change in industry-wide and public perceptions of OPEC. The Organization has ably demonstrated its credentials as a body committed to international cooperation, working with other producers, honouring its commitments and promoting mutual respect among all nations.
Let me stress that we also recognize our mission is never accomplished; the challenge of balancing the market and maintaining stability is a continuous process. This was in evidence at the most recent meeting of the JMMC in Baku, Azerbaijan, on March 18. The Committee recognized the current, critical uncertainties surrounding the global oil market throughout 2019, and stressed on the shared responsibility of all participating countries in the ‘Declaration of Cooperation’ to sustain market stability and prevent the recurrence of any market imbalance.
“Every country understands the importance of achieving full and timely conformity with their voluntary production adjustments under the decisions of the 175th Meeting of the OPEC Conference and the 5th OPEC and non-OPEC Ministerial Meeting, on the 6 and 7 December 2018.”
He added: “Overall conformity levels to the new voluntary production adjustments, reached almost 90per cent for the month of February 2019, which is up from 83per cent in the month of January. We expect them to improve further in the coming months. While we have seen a marked improvement in market conditions in the 1Q19, compared to the turbulence and volatility of the 4Q18, with the market steadily moving towards a more balanced state, we still believe we need to see inventory levels drop further.”