By Samuel Oyejola
The price of crude oil is expected to rise next year. According to the World Bank the price per barrel is expected to hit $56.
Crude oil price is currently $53 per barrel but according to the World Bank report, Commodity Market Outlook for October, the rise is expected in the coming year as market moves further to balance.
The report stated that market is expected to remain well supplied, amid expected strong gains in supply from countries outside Organisation of Petroleum Exporting Countries (OPEC) led by the United States shale oil.
Although OPEC currently operates a cut back agreement among member nations in output with exemption of Libya and Nigeria, the cutback in production is expected to extend to the coming year. This would be part of the discussion during the next meeting of the group in November.
Time Nigeria gathered that due to the reduction in militant’s attacks on pipelines in the Niger Delta, Nigeria’s production currently stands at 1.7mb/d. the National Bureau of Statistics reports that export in the second quarter of 2017 increased compared to the Q1-2017 and Q2-2016.
Although the country is exempted from production cut directive for member countries of OPEC, should production continue to soar, Nigeria may cut production.
Nigeria currently produces 1.7 million barrels per day. If Nigeria is able to meet the 1.8 million b/d target it would have to cut its production.
The world bank Report indicated that Market projection suggest that there appears little scope for meaningful stock draws next year, assuming agreed production cuts from OPEC and non-OPEC producers extends through the end of the coming year.
On the demand, the CMO revealed that international demand is expected to soar by 1.4mb/d (1.4%) to average a record high 99.1 mb/d.
“Nonmembers of Organisation of Economic Corporation and Development (OECD) oil demand growth is projected to return to 1.3mb/d roughly its long term trend with China rising by more than 0.3mb/d and other Asian countries projected to increase by 0.6mb/d.
“OECD oil demand growth is expected to be modest, increasing just 0.1mb/d,” the report stated.