The rebound in global oil prices following a record decline in the price of the commodity in 2020 has helped bolstered the Nigerian oil and gas sector in the first half of the year.
The sector gained 37.61 percent to emerge as the biggest gainer in the first half of 2021 despite Nigeria’s weak macroeconomic fundamentals.
The gauge of the sector, the Nigerian Exchange Limited oil and gas index, rose from 226.41 index points on January 4th, 2021 to 311.28 index points on Friday, 2nd July 2021.
Brent crude oil, against which Nigerian oil is priced, slipped by 0.11 percent to $76.09 per barrel, while U.S. crude futures dipped 0.13 percent to $75.06 per barrel on Monday morning.
The slight decline was as a result of Saudi Arabia and UAE’s disagreement over when the current accord between OPEC+ should expire.
the UAE’s Energy Minister Suhail Al Mazrouei had said it would be unfair to extend the current cuts beyond April as it would affect his country which he claims has “sacrificed the most, making one-third of our production idle for two years”.
“We can’t make a new agreement under the same conditions – we have a sovereign right to negotiate that,” he said.
However, Saudi Arabia is pushing for OPEC to raise output by some 2 million barrels per day from August to December 2021 but extend remaining cuts to the end of 2022.
Under a proposed OPEC Plus deal, the UAE would proportionally cut its oil production by 18 percent, while Saudi Arabia would cut its output by 5 percent.
Negotiations over the dispute are set to resume on Monday.