Oil: Bonny Light price leaps to $68.01 … As Saudi Arabia cuts supply, targets $70

THE price of Bonny Light, Nigeria’s premium oil grade, yesterday, leaped to $68.00 per barrel in the international market as Saudi Arabia cuts supply in order to realise a target price of $70 per barrel.

The oil grade opened the week’s trading at $67.00. The price of other oil grades – Brent, WTI and the Organisation of Petroleum Exporting Countries, OPEC Basket – also stood at $67.48, $59.98 and $66.67 per barrel respectively in the market.

Consequently, OPEC which Joint Ministerial Monitoring Committee (JMMC) rose from a recent meeting to review the market stated: “The JMMC reiterated the critical role that the “Declaration of Cooperation” has played in supporting oil market stability since December 2016 and took note of the expressed commitment of all participating countries to ensure that such stability continues on a sustainable basis, as overall conformity reached almost 90% for the month of February 2019, which is up from 83% in the month of January.

“The Committee recognized the current, critical uncertainties surrounding the global oil market throughout 2019, and stressed on the shared responsibility of all participating countries to restore market stability and prevent the recurrence of any market imbalance.

“All participating countries present at the meeting, individually and collectively, assured the Committee that they will exceed their voluntary production adjustments over the coming months. To this end, the JMMC also urged all participating countries, including those not present at today’s meeting, to achieve full and timely conformity with their voluntary production adjustments under the decisions of the 175th Meeting of the OPEC Conference, 6 December 2018, and the 5th OPEC and non-OPEC Ministerial Meeting, 7 December 2018.”

Meanwhile, Saudi Arabia has started pushing towards the realisation of $70.00 through its oil cut policy.

Oil price.com stated: “Saudi Arabia has been signalling for weeks that it is and will be doing whatever it takes to rebalance the oil market by slashing exports and pumping well below its quota under the OPEC+ deal—despite US shale’s persistence.

“Yet, while neither the Saudis nor OPEC would officially admit that they are aiming for higher oil prices or a specific price of oil, the combined efforts of the OPEC/non-OPEC group to withhold 1.2 million bpd of supply are targeting a tighter market—and higher oil prices.”