March 31, 2021

Oil Market: Bonny Light price dips to $62.05 on reopening of Suez Canal

Crude oil price hits $65.85 per barrel after OPEC, Non-OPEC meeting

By Udeme Akpan

The price of Nigeria’s Bonny Light, Tuesday, dropped to $62.05 per barrel from $64.50 in the international market on the heels of the reopening of the Suez Canal for business.

The blockage of the Canal by a container vessel for over one week had scuttled the free shipment of goods, especially crude oil around the world, thus causing prices of many crudes, including Bonny Light and Brent to rise to $64.50, and $65.30 per barrel respectively.

Traders, however, said yesterday, that prices would likely continue to dip, not only because of the reopening of the Canal, but also as a result of the resurgence of coronavirus pandemic in the United States and other economies.

Despite the price drop, Nigeria’s 2021 fiscal plan would not be adversely affected as the budget was benchmarked on $40 per barrel, and 1.8 per barrel output, including Condensate.

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Nevertheless, the Organisation of Petroleum Exporting Countries, OPEC, disclosed that it was working towards achieving market stability.

Also, in a statement issued at the end of its recent OPEC and non-OPEC meeting, obtained by Vanguard, OPEC, stated: “The Meeting emphasized the ongoing positive contributions of the Declaration of Cooperation (DoC) in supporting a rebalancing of the global oil market in line with the historic decisions taken at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on 12 April 2020 to adjust downwards overall crude oil production and subsequent decisions.

“Overall conformity with the original decision was 103 per cent, reinforcing the trend of aggregate high conformity by participating countries.

“The Meeting noted that since the April 2020 meeting, OPEC and non-OPEC countries had withheld 2.3bn barrels of oil by end of January 2021, accelerating the oil market rebalancing.”

Vanguard News Nigeria