After a week of steep declines, oil prices rebounded on Friday thanks to a meeting between Saudi Arabia and Russia that calmed markets and support measures that stabilized a banking crisis.
Brent crude oil, against which Nigerian measures, rose by 1.46% to $75.79 a barrel, while U.S. West Texas Intermediate oil rose 1.76% to $69.55. Both benchmarks had hit more than one-year lows earlier in the week and were on track for their biggest weekly falls since December 2021.
The collapse of Silicon Valley Bank and Signature Bank and trouble at Credit Suisse and First Republic Bank had put pressure on oil and other global assets this week.
However, the commodity recovered some ground on Friday after the European Central Bank and U.S. lenders announced various measures to curtail the situation.
A meeting between oil producers Saudi Arabia and Russia on Thursday also helped to calm fears. Furthermore, WTI’s fall this week to less than $70 a barrel for the first time since December 2021 could spur the U.S. government to start refilling its Strategic Petroleum Reserve, which would boost demand.
Similarly, the rebound in Chinese demand for the commodity also supported the increase in price as reports shows the U.S. crude exports to China in March rose to its highest level in nearly two and a half years.
Analysts believe there is sufficient support for the oil price, with OPEC+ having to convene an extraordinary meeting.
An OPEC+ monitoring panel is due to meet on Apr. 3. Despite the rebound, conditions for volatile trading remain intact, and the oil price roller-coaster is pausing for breath but is by no means over, according to oil broker PVM’s Stephen Brennock.
Nigeria’s Oil Rig Count Soars From 11 to 30, Says NUPRC CEO
The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has announced a surge in the country’s oil rig count.
Komolafe disclosed that Nigeria’s oil rigs have escalated from 11 to 30, a substantial increase since 2011.
Attributing this surge to concerted efforts by NUPRC and other governmental stakeholders, Komolafe highlighted the importance of instilling confidence, certainty, and predictability in the oil and gas industry.
He explained the pivotal role of the recently implemented Petroleum Industry Act (PIA), which has spurred significant capital expenditure amounting to billions of dollars over the past two and a half years.
Speaking in Lagos after receiving The Sun Award, Komolafe underscored the effective discharge of NUPRC’s statutory mandate, which has contributed to the success stories witnessed in the sector.
The surge in Nigeria’s oil rig count signifies a tangible measure of vibrant activities within the upstream oil and gas sector, reflecting increased drilling activity and heightened industry dynamism.
Also, Komolafe noted that NUPRC has issued over 17 regulations aimed at enhancing certainty and predictability in industry operations, aligning with the objectives outlined in the PIA.
Oil Prices Rebound in Asian Markets Amid Red Sea Shipping Concerns
Middle East Tensions Keep Oil Prices Near Three-Week Highs, China’s Economic Recovery Offers Support
Oil prices remained close to three-week highs on Tuesday, buoyed by ongoing tensions in the Middle East and signs of economic recovery in China.
Brent crude oil, against which Nigerian oil is priced, dipped by 29 cents to settle at $83.27 a barrel while U.S. West Texas Intermediate (WTI) crude oil fell 38 cents to $78.08 a barrel.
Geopolitical uncertainties in the Middle East, particularly heightened by Iran-aligned Houthi attacks on shipping lanes, continued to influence market sentiment.
The Houthis’ recent strikes have targeted vessels in the Red Sea and Bab al-Mandab Strait, escalating concerns about disruptions to global shipping.
Meanwhile, China’s economic resilience served as a counterbalance to the geopolitical tensions. The country’s tourism revenue surged by 47.3% year-on-year, surpassing pre-COVID levels during the Lunar New Year holiday.
Also, China implemented a record cut to a benchmark mortgage reference rate to stabilize its property market and economy.
Despite these supportive factors, concerns about global oil demand lingered following a bearish report by the International Energy Agency (IEA).
The IEA revised its 2024 oil demand growth forecast downward, reflecting the ongoing transition to cleaner energy sources worldwide.
As such, market participants remain vigilant about the delicate balance between geopolitical risks and demand dynamics influencing oil prices.
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