March 22, 2022

Oil Price: Bonny Light rise to $109.2 per barrel

Bonny light

Bonny light

By Prince Okafor

Nigeria’s crude oil grade Bonny Light, yesterday rose to $109.2 per barrel in the international market, after closing lower over the weekend.

Available market statistics showed that Bonny Light witnessed a marginal rise of 0.26 cent, while Brent witnessed a significant leap of 6 percent to $114.40.

Further data shows that the United States, West Texas Intermediate, WTI, also rose 5.5% to $110.5 a barrel following the European Union countries considered joining the United States in a Russian oil embargo, while a weekend attack on Saudi oil facilities caused jitters.

According to the Organisation of Petroleum Exporting Countries, OPEC’s Secretariat calculations, its basket of thirteen crudes stood at $105 a barrel, compared with $104 the previous day,

“The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).”

Meanwhile, Nigeria have been struggling in recent time to meet the OPEC production quota pegged at 1.8 million barrels per day (bpd).

OPEC’s Monthly Oil Market Report (MOMR) for March, 2022 showed that Nigeria’s crude oil production declined to an average of 1.417 million bpd in February 2022.

While reacting to the development, an Oil and Gas Expert, Charles Majomi, in a chat with newsmen, stated that for Nigeria to increase oil production values and meet OPEC’s quota, there should be security on the onshore asset while the cost of extracting the crude from the ground should be optimised.

In his word: “The federal government needed to ensure against infrastructure vandalism and increase security to mitigate crude oil theft.

“Though Nigeria has some of the highest production cost of crude oil, we have to optimise the production processes to decrease cost and break the cartel responsible for Illegal bunkering and diversion of crude oil.

“Oil production has been constrained by lack of investment in the upstream sector; we need that to replenish the output.

“A lot of crude oil is being diverted through illegal means even though our production is significantly higher than what we are presenting as production values to OPEC. The issue of illegal crude oil diversion is quite a disturbing issue,” he said.