…As OPEC says global glut almost eliminated
15 May 2018, Sweetcrude, Lagos – The price of Nigeria’s crude oil grade, Bonny Light, increased by $5.70 between March and April this year, statistics from the new-released Organisation of the Petroleum Exporting Countries, OPEC’s, Monthly Oil Market Report, MOMR, for May has shown.
According to the report released on Monday, Bonny Light climbed from $67.05 in March to $72.75 in April, an 8.5 percent increase in price, resulting from the production cuts by OPEC and its partners.
Bonny Light sold for $53.75 in 2017 and $68.98 earlier this year.
The OPEC cuts which saw cutbacks of 1.8 million barrels per day of output, had achieved a 149 percent commitment in April, according to statistics by the organisation’s ecretariat in Vienna, Austria.
Meanwhile, the May’s MOMR said global oil glut has almost been eliminated, adding that producers were cutting more than required under the production cuts deal.
According to the report, oil inventories in the Organisation for Economic Cooperation and Development, OECD, or industrialised nations in March stood at 9 million barrels above the five-year average, down from 340 million barrels above the average in January 2017.
“The oil market was underpinned in April by renewed geopolitical issues, tightening product inventories and robust global demand,” OPEC said in its report.
Due to the cuts, oil prices LCOc1 (Brent) has reached $78 a barrel, their highest since 2014.
Oil was trading above $77 on Monday, moving up since the OPEC report was published.
The main goal of the supply deal was to reduce excess oil stocks to the five-year average.
However, despite extending the cuts twice, OPEC and its partners have shown further commitment to proceed with the Declaration of Cooperation, DoC into 2019.
OPEC output rose by just 12,000 barrels per day (bpd) to 31.93 million bpd in April, according to figures OPEC collects from secondary sources. That is roughly 800,000 bpd less than the amount OPEC says the world needs from the group this year.
Figures reported directly from OPEC members showed even deeper declines in production.
Venezuela, which output has plunged due to an economic crisis, told OPEC its production fell to 1.505 million bpd in April, believed to be the lowest in decades.
Top exporter Saudi Arabia told OPEC it cut output by 39,000 bpd to 9.868 million bpd, which is the lowest since the supply cut deal began, based on figures Riyadh reports to the group.