The popular Nigerian crude contract, Bonny Light, approached the $95 per barrel mark amidst heightened market uncertainty driven by persistent geopolitical tensions, particularly in the Middle East and crucial global trade chokepoints such as the Strait of Hormuz.
Brent crude prices increased by 6.5 per cent, while European gas prices rose by just under 9 per cent.
Instability and unrest in the Middle East continue to influence energy prices, although an agreement between Iran and Oman regarding transit regulations through the Strait of Hormuz may now be within reach; however, larger unresolved issues persist.
Nigerian crude oil is typically priced relative to dated Brent, with most varieties being light and sweet, including benchmarks such as Bonny Light, Forcados, and Escravos.
Recent trading has shown volatility, with prices fluctuating from the low of $80s up to the mid-$90s per barrel.
However, macroeconomic demand factors, primarily relating to China and the ongoing global stock adjustments, are expected to restrain overall price rallies despite potential supply disruptions due to geopolitical risks.
Furthermore, Nigerian crudes with lower sulfur content remain in high demand in both Asia and Europe.
These crudes have been competitively outperforming other light sweet crude sources increasingly available from the Americas.
Nigerian crude production averaged between 1.505 million and 1.546 million barrels per day last month, representing a decrease of approximately 2.3 per cent to 4 per cent from the previous month and breaking a period of consecutive growth.
The decline was mainly attributed to technical and operational issues, notably severe production declines reported from ExxonMobil’s Erha and Akpo fields.
However, Nigeria maintained production levels close to its OPEC quota floor of 1.5 million barrels per day, indicating a relatively stable output history following years of underproduction.
Including condensate production of about 170,000 barrels per day, total hydrocarbon output would approximate 1.67 million barrels per day.
