Home News Oil price falls to $86/barrel

Oil price falls to $86/barrel

by Harry Choms
Oil price

Brent, the global crude benchmark, fell in price on Sunday, as virtually all oil grades saw lower prices on the first day of the week, despite efforts by the Organization of Petroleum Exporting Countries to stabilize the commodity’s price.

As oil prices fell, data from OPEC’s September 2022 Oil Market Report revealed that an oil rig in Nigeria was dormant in August 2022, compared to the number of operational rigs the previous month.

According to industry figures seen in Abuja on Sunday, Brent fell by $4.31, or 4.76 percent, to $86.15 per barrel as of 4.18 pm Nigerian time.

WTI crude fell $5.75, or 5.69%, to close at $78.74/barrel, while the cost of oil grades in the OPEC Basket fell $0.24, or 0.25 percent, to close at $96.31/barrel.

According to data from OPEC’s World Rig Count on operational rigs in Nigeria as of August this year, the country’s operational rig count decreased from 11 in July to 10 in August.

According to the organization, the average number of operational oil rigs in Nigeria in 2019 was 16, but this fell to 11 in 2020 before finally crashing to seven in 2021.

The average number of operational oil rigs in Nigeria in the first and second quarters of 2022 was estimated to be eight and ten, respectively.

According to OPEC data, the number of operational rigs increased to 11 in July of this year, but this was not sustained, as it dropped to 10 in August.

The alarming rate of crude oil theft was the primary reason for the dormancy or halt in the operations of Nigeria’s oil rigs.

The Federal Government, oil unions, and the military, among others, have all expressed concern about this.

For example, the Petroleum and Natural Gas Senior Staff Association of Nigeria recently stated that some oil companies were forced to shut down some of their oil wells due to persistent crude theft.

PENGASSAN also stated that the military should be forced to explain how massive amounts of oil were stolen from the Niger Delta despite their personnel protecting oil installations.

Chief Ukadike Chinedu, National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, told our correspondent that while there may be some inconsistencies in oil theft data, the volume of crude stolen from the country was massive.

He said;

On the quantity of oil being stolen from Nigeria, the various figures you see are all estimated figures. There is no accurate gauge to measure the volumes of crude oil being stolen in this country, because we don’t have a standard measuring system.

But because of the recent incident of an intercepted vessel for allegedly trying to steal crude oil from Nigeria, we think that a measurable quantity of our crude oil is not accounted for.

He added;

I also know that Nigeria is losing a lot of revenue from this oil theft and stakeholders are not happy with how the involved cartel handling the matter.

It is, therefore, pertinent that the Federal Government should come out with a standard measuring instrument that will give the exact number of daily production, export consumption and the amount being reserved, as well as what we channel for local use.

PENGASSAN recently staged protests in Abuja, Lagos, Kaduna, Warri, among other locations, to kick against the continued theft of crude oil in Nigeria.

Also, the Executive Secretary, Nigeria Extractive Industries Transparency Initiatives, Ogbonnaya Orji, said in an interview that the 2021 audit report of the oil sector would be ready this year to ascertain the level of oil theft across the country.

“We want to establish the quantity of crude that is produced, how much of that can be accounted for and how much was stolen,” he stated.

Orji added, “We should establish the amount that was exported, reserved for local consumption and how this was reserved or managed.”

related posts

Leave a Comment