By Joseph Bamigboye
The demand in China economy has raised global oil prices to $41.20 per barrel on Wednesday.
The price of Organization of the Petroleum Exporting Countries (OPEC) basket of 13 crudes stood at $41.20 as the oil price has been on a steady increase in the last few days.
The price rose from $40.57 on Monday and closed on Tuesday at $40.68 per barrel.
The international oil price rebounded, drawing support from robust China demand. Although, concerns about waning demand elsewhere and supply resumptions in Norway, the Gulf of Mexico, and Libya were weighed.
China, the world’s top crude oil importer, took in 11.8 million barrels per day (bpd) of oil in September, up 5.5per cent from August and up 17.5 per cent from September last year.
According to Commerzbank, “Currently, oil demand is driven primarily by China,” and according to IEA Chief, Fatih Birol, “The era of global oil demand growth will come to an end within the next 10 years, but in the absence of a large shift in government policies, I don’t see a clear sign of a peak.”
S&P Global Platts Analytics estimates Libyan crude supply could return to 500,000 b/d this month but warned that “longer-term stability remains uncertain.”
Reacting, the Managing Director, Degeconek, Mr. Abiodun Adesanya, said, “I wouldn’t call that an ncrease because it’s not a significant increase. These are small increases which can go up or down.
He explained that the reason for the previous reduction in the oil price was essentially as a result of what happened in US, especially the election related issues. President Donald Trump was infected with COVID-19 and recovered. All these had effect on stock price including oil price.
He buttressed that America has effect on the economic of the world, so there’s tendency as well.
Adesanya said “I wouldn’t ascribe this to any major increase. I need to still monitor what is going on in others to see clearly.”
“PEC is trying to maintain cut and to keep the quota at a level that is sustainable but we need more time to see if the trend is sustainable or not.”
“Of course we are moving into the cold months in which the demand for gas will increase because of home heating.
“I would not expect any significant increase in the oil price.”