Fuel scarcity may begin from next week in major cities if…
Oil prices shut up to its highest since late 2014 as U.S. crude inventories declined after indications emerged that Saudi Arabia is seeking to push oil prices higher.
However, due to the collapse of local refining capacity over the years in Nigeria, rising oil prices which ordinarily supposed to be a blessing has remained a basket of mixed feelings as whenever global oil prices go up, it rebounds into either hike in pump price or scarcity of petroleum products.
The reason is because, products consumed are mainly imported and cost of imports is determined by oil price movements from time to time.
Only recently, the Minister of State for Petroleum, Dr. Ibe kachukwu revealed that contrary to earlier speculations that the present government had successfully stamped out fuel subsidy, the federal government spends well over N1.4tn yearly on subsidy for premium motor spirit.
At the close of activities yesterday, Brent crude oil futures rallied as high as 74.44 dollars a barrel, the strongest since Nov. 27, 2014, the day that OPEC decided to pump as much as it could to defend market share.
Brent futures were at 74.35 dollars per barrel at 0823 GMT, up 87 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures rose 71 cents to 69.18 dollars a barrel. WTI had earlier hit 69.27 dollars , its best level since Dec. 2, 2014.
RBC said in a note that “Oil prices continued to climb on Thursday as a decline in U.S. crude inventories and commentary from Saudi Arabia that it will be happy to see crude rise to 80 dollars or even 100 dollars helped boost prices”.
The Organisation of the Petroleum Exporting Countries (OPEC) and other major producers including Russia started to withhold output in 2017 to rein in oversupply that had depressed prices since 2014.
OPEC and its partners will meet in Jeddah, Saudi Arabia, on April 20. OPEC will then meet on June 22 to review its oil production policy.Since the start of the supply cuts, crude inventories have gradually declined from record levels toward long-term average levels.
Further supporting oil prices is an expectation that the U. S. will re-introduce sanctions against Iran, OPEC’s third-largest producer, which can result in further supply reductions from the Middle East.
