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Oil woes, as Bonny light drops by 34.8% in 11 months

The average price of Bonny Light, Nigeria’s premium oil grade, has dropped by 34.8 percent to $42.9 per barrel in the past 11 months of 2020, due mainly to the prolonged Coronavirus pandemic, drop in economic activities and oil demand.

The data obtained from the Organisation of Petroleum Exporting Countries, OPEC reports, showed that the average price of the oil grade, stood at $42.9 per barrel between January and November 2020, thus indicating a fall of 34.8 percent when compared to $65.8 per barrel, recorded in the corresponding period of 2019.

This also showed a huge difference of $22.9 per barrel when compared to the $65.8 per barrel recorded in the corresponding period of 2019, meaning that the nation did not earn much from oil during the period under review.

Demand, Supply

The organisation, stated: “World oil demand for 2020 is expected to decline by 9.77 mb/d, marginally lower than in last month’s assessment.

“Weaker-than-expected data from the Organization for Economic Co-operation and Development, OECD in the third quarter of 2020, Q3’20, mainly due to lower transportation fuel demand in the US and OECD Europe, led to a downward revision of around 0.18 mb/d for the OECD group.

“For 2021, world oil demand growth is revised lower by 0.35 mb/d, to the growth of 5.90 mb/d. This is due to the uncertainty surrounding the impact of COVID-19 and the labour market on the OECD transportation fuel outlook for 1H21.

“Petrochemical feedstock and industrial fuels are forecast to gain momentum on the back of improving economic activities, with total oil demand projected to reach 96.89 mb/d in 2021.

“Non-OPEC supply for 2021 is adjusted down by 0.1 mb/d and is now forecast to grow by 0.85 mb/d to average 63.52 mb/d, mainly due to downward revisions in Russia’s output.

SOURCE: Vanguard