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Excess oil revenue drops by $6.31 per barrel

…As Bonny light price falls to $67.28 in May

The nation’s excess oil revenue dropped from $13.59 per barrel to $7.28 per barrel, following increased instability in the global oil market between the first and last week of May, 2019.

A compilation and analysis of oil prices by Vanguard during the period showed that the price of Nigeria’s Bonny Light, the nation’s premium oil grade which stood at $73.59 in the first week of the month dropped to $67.28 in the last week, indicating a fall of $6.31 per barrel.

It showed that the prices of other crudes also witnessed setbacks in the volatile market because of the prevailing instability.

For instance, the price of Brent, West Texas Intermediate, WTI and OPEC Basket dropped from $71.94, $63.53 and $71.07 to $70.00, $60.10 and $67.12 respectively during the period.


There was an indication that the prices of crudes will continue to drop in the coming months, apparently because of the continued instability.

For instance, on Monday, the price of Bonny light dropped further by $2.72 to $65.28 per barrel, indicating further drop in the nation’s excess oil revenue.


However, in a statement sent to Vanguard, the Organisation of Petroleum Exporting Countries, OPEC, stated: “Following its 14th Meeting, which took place on 19 May 2019, in Jeddah, the Kingdom of Saudi Arabia, the Joint Ministerial Monitoring Committee (JMMC) has reaffirmed its commitment to achieving a balanced market and working towards oil market stability on a sustainable basis with solid fundamentals.

“The JMMC expressed its satisfaction regarding the critical role which the ‘Declaration of Cooperation’ (DoC) played in the oil market recovery seen in the first quarter of 2019 compared to the fourth quarter of 2018, supported by high conformity to the voluntary production adjustments by participating countries. Conformity for the month of April 2019 was 168 percent, and this record high figure has also had positive ramifications for global economic growth in the first four months of 2019. Average conformity has reached 120 percent since January 2019.

“The Committee noted that an agile and flexible approach has been critical to the success of the DoC to date and will be key going forward. Since the DoC was signed on 10 December 2016, the partners have been able to adapt course depending on market conditions.

“When the market appeared skewed to oversupply, voluntary production adjustments were adopted and implemented, as was the case in December 2016 and December 2018, and equally, when concerns regarding demand outpacing supply surfaced as the market tightened, as was the case in June 2018, partners in the DoC took appropriate action.

“In analyzing current oil market conditions and macroeconomic developments, the Committee also recognized that critical uncertainties remain, including ongoing trade negotiations, monetary policy developments and geopolitical challenges.”

The JMMC requested that the Joint Technical Committee and the OPEC Secretariat continue to monitor and analyze oil market developments and, particularly, oil inventory projections in the coming weeks with a view to the next JMMC meeting making a recommendation to the OPEC Conference and OPEC and non-OPEC Ministerial Meeting, which are scheduled to meet in June 2019, regarding appropriate actions on the part of participating countries for the second half of 2019.”