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

By Prince Okafor

As the prices of crude continue to leap, due mainly to shortages in the United States and recovery from the coronavirus pandemic, experts have predicted further rise to $90 per barrel, from $78 in the global market.

An energy analyst with Goldman Sach Group, Damien Courvalin, said: “While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts.

“Brent could hit $90 a barrel by year-end as the market is in a bigger deficit than many realise.

“This deficit will not be reversed in coming months, in our view, as its scale will overwhelm both the willingness and ability of Organisation of Petroleum Exporting Countries, OPEC+ to ramp up.”

Also, an energy expert Dr Bala Zaka, said: “With the successful vaccination and other initiatives against the coronavirus pandemic, there are indications that the demand for crude oil would continue to increase, thus causing prices to rise.

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“Consequently, I am optimistic that the market would witness much stability, even as OPEC+ continues to find lasting solutions to issues affecting the market.”

However, in its September 2021 Monthly Oil Market Report, MOMR, OPEC, stated: “World oil demand growth in 2021 remains unchanged from last month’s assessment, showing growth of 6.0 mb/d despite some offsetting revisions.

“Oil demand in 3Q21 has proved to be resilient, supported by rising mobility and travelling activities, particularly in the OECD.

“At the same time, the increased risk of COVID-19 cases primarily fuelled by the Delta variant is clouding oil demand prospects going into the final quarter of the year, resulting in downward adjustments to 4Q21 estimates.

“As a result, 2H21 oil demand has been adjusted slightly lower, partially delaying the oil demand recovery into 1H22.

“Global oil demand in 2021 is now estimated to average 96.7 mb/d. In 2022, oil demand is expected to robustly grow by around 4.2 mb/d, some 0.9 mb/d higher compared to last month’s assessment.

“Revisions were driven by both the OECD and non-OECD, as the recovery in various fuels is expected to be stronger than anticipated and further supported by a steady economic outlook in all regions.

“Oil demand in 2022 is now projected to reach 100.8 mb/d, exceeding pre-pandemic levels”.

Vanguard News Nigeria

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