crudeHope is gradually rising for the nation’s economy as the price of crude oil in the international market has risen to $40per barrel.
Data obtained from the Organisation of Petroleum Exporting Countries, OPEC website on Friday, indicates that Brent crude at the international benchmark rose as much as 5 per cent to hit $37 a barrel for the first time since January 5.
US benchmark West Texas Intermediate rose a similar amount to a high of $34.69, a level last hit in late January.
Both oil markers later pared gains.
Also, price of OPEC basket of thirteen crudes stood at $32.34 a barrel, compared with $31.61 the previous day, according to OPEC Secretariat calculations. The new OPEC Reference Basket of Crudes, ORB, is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Minas (Indonesia), Iran Heavy (Islamic
Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela.
However, the volatility has been attributed to chain reaction to some global events pipeline. For instance, stoppage in Turkey cut off about 600,000 barrels a day of crude from Iraqi Kurdistan for the past two weeks, with reports suggesting the line may not be back until the middle of March.
In Nigeria, Royal Dutch Shell has declared force majeure on about 250,000 b/d of its Forcados crude oil grade following a pipeline leak, with little clarity about when it will reopen.
Saudi Arabia, OPEC’S de facto leader, and Russia, the largest oil exporter outside the oil cartel, are also working towards an agreement to freeze output, though it is yet to win the support of all OPEC members.
During a major industry gathering in Houston this week, Ali al-Naimi, Saudi Arabia’s oil minister, ruled out the possibility of cutting output, damping hopes of more aggressive action to curb a glut estimated by some traders to be as large as 2m b/d.
Prices have been volatile so far in 2016, with Brent dropping to a 12-year low of $27.10 a barrel in January before embarking on an uneven recovery. Daily swings of more than 7 per cent have been recorded on four occasions in February alone.
Between 2012 and 2013, when oil averaged close to $100 a barrel, there was only one trading day when Brent moved 7 per cent over the entire period.
A near-70 per cent price slide over the past 20 months is starting to have an impact on US oil production with many analysts predicting steeper slides this year as companies’ pull back drilling and tracking in shale fields. “The situation in the US shale oil patch seems to be deteriorating substantially due to low prices,” said analysts at JBC Energy.

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