By Udeme Akpan
THE price of Bonny Light, Nigeria’s premium oil grade, has risen from $63.00 to $64.30 per barrel at the international market, the highest in the past three weeks.
The latest price showed an excess of $7.30 per barrel against the $57.00 reference price of the nation’s 2020 Budget.
Market watchers attributed the sudden leap in price to the continued efforts of the Organisation of Petroleum Exporting Countries, OPEC, to achieve stability in the volatile oil market.
In an e-mail to Vanguard, OPEC stated that the meeting of its members — Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Indonesia, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador, Gabon, Angola, Equatorial Guinea and Congo — to review the market and adopt new measure would take place in Vienna, Austria on Thursday, December 5, 2019.
In its World Oil Outlook, OPEC stated: “Total primary energy demand is set to expand by a robust 25 per cent between 2018 and 2040. All forms of energies will be required in the future to help meet expanding demand in a sustainable way, balancing the needs of people in relation to their social welfare, the economy and the environment. Natural gas witnesses the largest demand growth in absolute terms, and renewables the largest growth in percentage terms.
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“Oil is expected to remain the fuel with the largest share in the energy mix throughout the forecast period to 2040. Oil demand is forecast to reach 110.6 mb/d by 2040. The non-OECD drives oil demand with the growth of 21.4 mb/d by 2040 (compared to 2018), whereas the OECD region is expected to contract by 9.6 mb/d. Long-term demand growth comes mainly from the petrochemicals (4.1 mb/d), road transportation (2.9 mb/d) and aviation (2.4 mb/d) sectors.
“The total vehicle fleet – including passenger and commercial vehicles – is estimated to grow by more than one billion by 2040 to around 2.4 billion. The long-term share of electric vehicles in the total fleet is projected to reach a level of around 13 per cent in 2040, supported by falling battery costs and policy support. But the majority of the growth continues to be for conventional vehicles. Non-OPEC liquids supply is projected to grow by 9.9 mb/d between 2018 and 2024, the majority coming from US tight oil, but from the mid-2020s non-OPEC sees a steady decline.
“Demand for OPEC liquids is projected to increase to around 44.4 mb/d in 2040, up from 36.6 mb/d in 2018. Crude distillation capacity additions of around 8 mb/d are expected between 2019 and 2024, with over 70 per cent in the Asia-Pacific and the Middle East. This is close to 50 per cent of the total capacity additions required in the long-term to 2040. Global crude oil and condensate trade is estimated to remain relatively static at around 38 mb/d between 2018 and 2025, before increasing to around 42 mb/d by 2040.”
It added: “In the period to 2040, the required global oil sector investment is estimated at $10.6 trillion. Energy poverty remains a major global challenge, with almost one billion people still without access to electricity and three billion lacking access to clean fuels for cooking. OPEC remains fully engaged and supportive of the Paris Agreement on climate change. The world needs to look for cleaner and more efficient technological solutions everywhere across all available energies.”
In his budget presentation to the National Assembly, President Muhammadu Buhari had stated: “The 2020 Budget is expected to accelerate the pace of our economic recovery, promote economic diversification, enhance competitiveness and ensure social inclusion. We are optimistic of attaining higher and more inclusive GDP growth in order to achieve our objective of massive job creation and lifting many of our citizens out of poverty.”