The international oil benchmark, Brent crude, soared to a peak of $57.87 per barrel mark on Tuesday, February 2, for the first time since early February last year on production cuts compliance.
Brent, against which Nigeria’s oil priced, rose by more than $1.8 to $57.87 per barrel as of 3:48 pm Nigerian time on Tuesday.
The last time the oil price was above $57 was on February 5, 2020.
While the upturn in crude oil prices is expected to translate to increased revenue from oil exports for the Nigerian government, it would also push up the landing cost of fuel imported into the country.
OPEC+ members complied almost completely with their production cut quotas last month, an unnamed source from the oil cartel told Bloomberg.
At 99 percent, according to the source, the compliance level was based on preliminary estimated, to be reviewed tomorrow by the Joint Technical Committee of the group.
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OPEC+ agreed to cut 7.2 million bpd in combined production in January, in what was widely seen as a compromise decision for aggressive cutters like Saudi Arabia and more reluctant ones like Russia, which proposed adding 500,000 bpd to the group’s production each month between January and April.
For February and March, the cartel agreed to keep production cuts at 7.2 million bpd.
However, Nigeria and Lybia saw lower output due to internal problems.
This is because Nigeria had to declare force majeure on Qua Iboe exports after a fire erupted at the export terminal, halting production and loading, shipping and trading.
However, Qua Iboe export is set to resume as production had started to ramp up to normal levels of 200,000 b/d in the past week, according to sources, with the release of both the February and March loading programmes.
