Global oil rally and Nigeria’s price modulation

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By Sonny Atumah

The Organisation of the Petroleum Exporting Countries, OPEC and non-OPEC agreed to cut world supply by 1.8 million barrels of oil per day, bopd in November 2016; with the cuts extended to last through 2018. OPEC’s intent was to limit output to 32.5 million bopd to shore up prices. Expectedly many forecasted oil price rallies this year while others are despondent about the alliance and believe that oil price may have a downward slide in 2018. Proponents of a downward price regime believe that the fundamentals favour a reversal.

Oil

The United States Energy Information Administration, EIA predicted a 100 million bopd (OPEC 39.64 million and non-OPEC 60.69 million bopd contributions) demand this year up from the total demand of 98.39 million bopd in 2017.

OPEC deliberate cut in supply has drawn down crude inventories with oil price rallying from an average US$60 in…



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