Oil prices declined on Thursday after investors made profit as a result of the price rally which occurred this week. However, strong demand and short-term supply disruptions continue to support price surge.
Brent crude futures declined 0.4%, to $88.05 a barrel by 10:06 GMT. U.S. West Texas Intermediate (WTI) crude futures declined by 0.3%, to $86.67 a barrel.
The deficiency in oil supply continues to rise as an oil pipeline running from Iraq’s Kirkuk to the Turkish port of Ceyhan exploded on Tuesday.
Furthermore, the attack on United Arab Emirates by Yemen’s Houthis group on a country producing 2.9 million barrels perday has dented the supply side of the market.
Another subsequent supply shortfall has been from OPEC+, The International Energy Agency (IEA) on Wednesday said that the group produced about 800,000 barrels per day (bpd) below its production targets in December.
Meanwhile, in Nigeria surging oil prices has not been capitalized on by the federal government. As Brent crude prices rallies, poor production and inability to meet quota continues to ravage the oil sector.
Data from the Central Bank of Nigeria (CBN) reveals Nigeria generated $11.3 billion revenue from Crude oil and gas export when oil prices were at an estimated $75 pb in the third quarter of 2021 (Q3-2021).
Concurrently, According to the OPEC December 2021 monthly report, Nigeria, improved its oil output between October and November. Nigeria’s average crude oil production increased by 3.83% from 1.228 million bp/d to 1.275 million bp/d. irrespective of an improvements in production, the country still struggles to meet OPEC quota of 1.66 million bp/d.
