Why news is a mixed grill for Nigeria, biggest crude exporter and biggest importer of refined product in Africa + OPEC+ likely to stick with a planned increase to its oil output target for March
Oil rose on Wednesday, tuoching $90 a barrel for the first time in seven years, supported as tight supply and rising political tensions between Russia and Ukraine added to concerns about further disruption in an already-tight market.
Platforms Africa reports that the news of high crude prices is a mixed grill for Nigeria, which is both the biggest crude exporter and biggest importer of refined product in Africa.
Team Lead, Platforms Africa, Adeola Yusuf, in a reaction to higher crude oil prices while featuring on News Central TV said; “While a higher crude oil price means more revenues for Nigeria, it also signifies higher subsidy on hundreds of millions of litres of refined product imported into the country on daily basis.
“This is even spectacular now because the Nigerian government has just announced a N3 trillion spending for subsidy in the year 2022. The biggest-crude-exporter-and-fuel-importer status is rather unprofitable and un-economical for the country.
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“A lot, we are told, is being done by the government on local refining capacity and until this materialises, no one who understands the irony of a higher crude price will rejoice for the country.”
Meanwhile, the prices steadied after Brent crude earlier hit a seven-year high above $90 a barrel, as the market continued to balance concerns about tight worldwide supply with expectations that the U.S. Federal Reserve will soon tighten monetary policy.
Global benchmark Brent rose 15 cents to $90.11 a barrel by 11:40 a.m. EST (1640 GMT), while U.S. crude futures gained 18 cents to $87.53 in a volatile session with both contracts see-sawing between positive and negative territory.
Crude prices surged on Wednesday, with Brent climbing above $90 a barrel for the first time in seven years amid tensions between Russia and the West. Recent threats to the United Arab Emirates from Yemen’s Houthi movement have added to jitters in the oil market.
Russia, the world’s second-largest oil producer, and the West have been at loggerheads over Ukraine, fanning fears of disruption of energy supplies to Europe. The concerns are oriented more around natural gas supply than crude oil, however. read more
Russia said on Thursday it was clear the United States was not willing to address its main security concerns in their standoff over Ukraine, but kept the door open for further dialogue. read more
“The market is very erratic on headlines on the Russia-Ukraine situation,” said Phil Flynn, senior analyst at Price Futures Group. “There’s uncertainty about what’s going to happen.”
Weighing on prices, the U.S. Federal Reserve said on Wednesday that it is likely to raise interest rates in March and plans to end its bond purchases that month in its battle to tame inflation.
The U.S. dollar climbed after the announcement, making oil more expensive for buyers using other currencies. On Thursday, the dollar index climbed to the highest since July 2021. (.DXY), <=USD> read more
“A more pronounced price slide is being prevented by the Ukraine crisis, as there are still concerns that Russian oil and gas deliveries could be hampered in the event of a military escalation,” Commerzbank said after the morning price dip.
The market is starting to turn its attention to a Feb. 2 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a group known as OPEC+.
OPEC+ is likely to stick with a planned increase to its oil output target for March, several sources in the group told Reuters.
