Over the weekend, the price of Nigeria’s Bonny Light crude oil surged to $92.79 per barrel, up from $90.88 per barrel last Tuesday.
This increase is attributed to the impact of extended production cuts in the global oil market.
Russia has decided to extend its voluntary crude oil export cut by an additional 300,000 barrels per day until December 2023.
Oil prices soar in 2023
Meanwhile, Saudi Arabia has extended its daily supply cut of 1 million barrels into October 2023, aiming to stabilize oil prices.
The current oil price is the highest in 2023 and surpasses the 2023 budget benchmark price of $75 per barrel by $17.79.
Goldman Sachs Commodities Research predicts that ongoing supply cuts could push oil prices to $107 per barrel in 2024.
According to sector analyst Prof. Omowumi Iledare, Nigerians should anticipate further price increases due to rising demand, declining supply due to geopolitical factors, low inventory levels in the United States, and limited reserves replacement, which poses a risk to future supply.
Prof. Felix Amieyeofori, lead promoter of EnergyHub Nigeria, also suggests that oil prices could exceed $100 per barrel, driven by factors such as increased investment in renewable energy, low investment and production, and high fuel prices resulting from increased crude oil costs.