Indications are strong that the Nigerian National Petroleum Company Limited (NNPCL) and other oil marketers in the country may further adjust fuel pump prices before the year ends based on the spiking trend of crude oil prices in the international market.
In the past two weeks, the Brent crude oil and other variants’ prices have been increasing and by Monday, Nigeria’s Sweet Crude oil sold at above $100 per barrel even as analysts predict that Brent Crude variant may sold higher as Russia and Saudi Arabia continue to hold back supplies to the global market.
The crude oil prices figures showed that at the global oil market some grades of crude oil are already trading above that the $100 per barrel, reflecting an expectation of tight supply.
Specifically, the LSEG data indicated that Nigeria’s crude oil, Qua Iboe, surpassed $100 a barrel on Monday while Malaysian crude oil, Tapis, reached $101.30 last week, according tp Bjarne Schieldrop, an analyst at Swedish bank SEB, in a report.
Over the past few days, oil has risen to its highest level of 2023 as investors are focused on the prospect of a supply deficit in the fourth quarter after Saudi Arabia and Russia extended supply cuts. The two are the biggest producers in the OPEC+ group, most other members of which are also curbing output.
Speaking on the market prices trend, Schieldrop said: “The overall situation is that Saudi Arabia and Russia are in solid control of the oil market.”
Brent oil futures, a global benchmark, traded as high as $94.89 on Monday and the related benchmark used for trading much of the world’s physical cargoes, called dated Brent, stood just above $96 according to LSEG.
Nigeria’s Qua Iboe and some other crudes priced against Brent, are above $100 already because they are based on the price of dated Brent plus a cash differential or premium, currently assessed by LSEG at around $4.25 a barrel.
Schieldrop predicted that dated Brent would to move above $100 as “only noise is needed to bring it above.” Swiss bank UBS sees Brent futures reaching triple digits.
Also, UBS analyst, Giovanni Staunovo, forecasted: “We expect Brent to trade in a range of $90-100 over the coming months, with a year-end target of $95.”
