Oil prices rise above $58.17 as OPEC members commit to output cut

By Bisola Adeyemo

Following the commitment of output cut by members and non-members of the Organisation of Petroleum Exporting Countries, OPEC, has said, oil prices rose to over $58.17 per barrel yesterday in the international market.
Precisely, the price of Brent rose to $58.17 per barrel, recording over $2 over $56 recorded the previous day.
Similarly, Nigeria’s Bonny Light rose to $56.95 up from $55.44 per barrel as it was recorded this week, which indicates an excess of $16.95 over the $40 per benchmark price of the nation’s 2021 budget, which also based on 1.8 per barrel oil output, including condensate.
However, OPEC urged that it does not predict a rapid oil price recovery in 2021, stressing that there could be a very slow recovery, possibly from June this year, based on the ability of stakeholders to tackle the Coronivarus pandemic and other challenges, currently impacting the market.
Speaking on the Declaration of Cooperation (DoC), initiated by OPEC and non-OPEC members, at the S&P Global Platts Americas Petroleum and Energy Conference, Mohammad Sanusi Barkindo, OPEC Secretary-General, stated that: “Over the subsequent three years, from 2017-2019, the diligent, and coordinated response through voluntary production adjustment decisions taken by the DoC helped rebalance the market, restore stability and revive the industry.”
“When the year turned from 2019 to 2020, there was a great deal of optimism for the oil market in the coming 12 months, not only for the oil market but the global economy too.”
According to him, “By March, however, the COVID-19 pandemic had pervaded almost every aspect of our daily lives, with widespread lockdowns, economies in major distress, and many businesses shuttered in. In terms of the oil and gas industry, every producer was impacted.No one was immune.
“The DoC had to again stand up and be counted.The actionwas needed, and activities we did with the largest and longest production adjustments in the history of the OPEC, the DoC, and the oil industry agreed on 12 April 2020 to help counter the massive oil demand decline that at times was above 20 mb/d in April. The phased reductions in the adjustment levels over a two-year period demonstrated the full commitment of all participants to a common goal.”
While talking on optimism for 2021, he stated: “Nonetheless, we are cautiously optimistic for the global economic rebound in 2021, and significant oil demand growth. But we will continue to take a month-by-month approach to assess market conditions, and stand ready to take any necessary actions through the DoC. In looking further ahead, oil market stability, and more broadly, energy market stability, will be vital to the energy transition.”