Oil reaches $68 on falling supplies

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Oil prices rallied yesterday after data showed falling stockpiles of crude as refined fuels also plunged last week.

International Brent crude oil futures were up 74 cents, or 1.2 per cent, at $68.35 a barrel hitting a new high going back to Nov. 13.

U.S. West Texas Intermediate crude futures rose $1, or 1.7 per cent, to $60.03 per barrel, after its highest level since Nov. 12. The more heavily traded WTI contract for May delivery also rose above $60 a barrel yesterday.

WTI has rallied 32 per cent this year after losing nearly half of its value in the final months of 2018. Brent is also up more than 27 per cent year to date, boosted by production cuts from the Organisation of Petroleum Exporting Countries (OPEC) and United States (U.S.) sanctions against Iran and Venezuela.

Nigeria’s state-run oil firm, the Nigerian National Petroleum Corporation (NNPC) assured that it will achieve the 2.3million barrel per day production (mb/d) volume-target for the 2019 budget. It said measures have been put in place to attain the feat.

In a presentation to the Senate Committee on Finance on the 2019  – 2021 Medium Term Expenditure Framework (MTEF),  its Group Managing Director,  Dr. Maikanti Baru, said with improved security in oil bearing communities as a result of sustainable community partnership, the industry was confident of attaining the production target.

Represented by the firm’s Group General Manager, Corporate Planning and Strategy,  Mr. Bala Wunti, the GMD said though the country had production capacity of over 2.5mb/d, the unfortunate security situations of the past in areas of operation made it difficult to achieve desired production targets.

Baru said: “The current administration under President Muhammadu Buhari is strongly focused on engagement and sustainable community partnership which has resulted in improved security and production. This will further improve and we are thus confident of achieving the 2019 budget production target.”

On the possible impact of OPEC quota on production target, Baru said the production target of 2.3mb/d was a combination of liquid hydrocarbon production comprising crude oil and condensate, noting that the OPEC quota only covers crude oil production.

He said with the country’s condensate production currently oscillating between 400,000 to 600,000 bpd, the country was in a good position to attain the overall production benchmark. He said  the firm was working assiduously with other relevant agencies to ensure the attainment of the 2019 budget assumptions contained in the 2019 – 2021 Medium Term Expenditure Framework (MTEF).

Dr. Baru also said Nigeria’s  oil grade traded higher than Dated Brent, attributing the development to the recent reforms in the crude oil management regime with emphasis on entrenching pricing transparency and performance.

He restated NNPC’s commitment to transparency and efficiency in every aspect of its operations, stressing that under his watch, the corporation had recorded considerable gains in all the thematic indicators.

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