Uncertainties threaten oil market — OPEC
By Udeme Akpan
THE price of Bonny Light, Nigeria’s premium oil grade, yesterday, dropped further to $69.81, from $73 recorded the previous day in the global oil market.
This development was attributed to the negative impact of Omicron variant of the Coronavirus pandemic spread to major oil consuming nations, thus affecting demand.
In an interview with Vanguard, the Promoter, EnergyHub Nigeria, Dr. Felix Amieyeofori, had said: “The coming of Omicron Variant is a big surprise, especially to many people and institutions that were pleased with the relative stability the oil market had enjoyed in the past few months.
“The instability, characterised by low prices will likely return in the coming weeks as oil consuming nations and others, who were not prepared for its occurrence continue to lockdown their economies.
“Expectedly, the lockdown would culminate in shutdown of industries, travelling and other activities, thus reducing the demand for oil globally.
“The low demand for oil would affect the revenues of members of the Organisation of the Petroleum Exporting Countries, OPEC, including Nigeria until researchers, currently carrying out tests find lasting solutions to it.”
But in another interview with Vanguard yesterday, an Economist and Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said: “It is unlikely that the pandemic situation would degenerate to a level worse than the 2020 experience. Besides, the past one year has provided some learning experiences on the management of the pandemic. It is unlikely that we would witness anything near the shocks of 2020.”
However, speaking at the opening of the OPEC conference, yesterday, Secretary General OPEC, HE Muhammad Barkindo, the volatile market was loaded with many uncertainties.
He said: “We need to consider the market implications of last week’s announcement of the possible coordinated release of 70 million barrels of oil from the strategic reserves of several consuming countries. The implications of such uncertainties for excess supply in 1Q-2Q2022 should be carefully monitored.
“The future of monetary policies, inflationary pressures, and the possible reintroduction of lockdowns, vaccine uptake rates, the vaccine-resistance of the Omicron variant and supply-chain bottlenecks are some of the uncertainties clouding the picture.”