Barely 24 hours after the decision of the Organisation of Petroleum Exporting Countries, OPEC, and its allies, to stabilize crude oil prices, report of the United States Energy Information Administration, USEIA, yesterday, forced a sharp drop in the prices across all grades including Nigeria’s Bonny Light.
The global average price had trended above $100 per barrel following the OPECs decision, but the prices tumbled to an average of $90 yesterday as USEIA announced that there was 4.5 million barrels (mb) of oil inventories in the market.
The current price is the lowest since Russia invaded Ukraine at the end of February 2022.
However, it was gathered that this could temporally hinder or delay the efforts of OPEC to achieve stability in the volatile global market.
OPEC had Wednesday, taken major decisions at the 31st OPEC and non-OPEC Ministerial Meeting, held via video conference to achieve stability in the global market.
In a statement after the meeting OPEC said: “The Meeting noted the dynamic and rapidly evolving oil market fundamentals, necessitating continuous assessment of market conditions.
“The Meeting noted that the severely limited availability of excess capacity necessitates utilizing it with great caution in response to severe supply disruptions.
“The Meeting highlighted with particular concern that insufficient investment into the upstream sector will impact the availability of adequate supply in a timely manner to meet growing demand beyond 2023 from non-participating non-OPEC oil-producing countries, some OPEC Member Countries and participating non-OPEC oil-producing countries.’’