- US West Texas Intermediate (WTI) Crude Rose To $83.83
As Organisation of Petroleum Exporting Countries OPEC+ ministers meet on Wednesday April 4, 2024 to review impact of production cuts, Crude oil prices hit $87 on Monday April 1, 2024 signifying the highest rate in five months.
Brent crude increased by 0.56 percent to $87.54 a barrel while US West Texas Intermediate (WTI) crude rose 0.79 percent, to $83.83 at 20.00 WAT.
Consequently, the development puts both crude benchmarks on track for their highest close since October 27, 2023.
This is above the $77.96 per barrel the federal government benchmarked as oil price in the 2024 budget.
It is also higher than the $65 per barrel used by the Nigerian National Petroleum Company (NNPC) Limited to calculate the allocated (90,000 barrels) crude in the $3.3 billion crude-for-cash loan agreement with African Export-Import Bank (Afreximbank).
Meanwhile, lower exports from both Iraq and Nigeria, in combination with continuing voluntary supply cuts have resulted in reduced oil production for OPEC in March, according to a Reuters survey published on Monday.
READ ALSO: OPEC: Crude Oil Production Increases in Nigeria, Libya
Based on the survey data, OPEC output for March was at 26.42 million barrels per day on average, compared to 50,000 bpd for February. OPEC+, the expanded cartel including Russia, agreed in early March to prolong voluntary oil output cuts from the first quarter into the second quarter of this year. The initial cuts of 2.2 million barrels per day were endorsed by OPEC+ in November.
OPEC+ has been implementing successive output reductions since late 2022 to stabilize the market amidst heightened production from non-member producers like the United States, coupled with concerns regarding demand due to elevated interest rates in major economies.
On Wednesday this week, OPEC+ ministers will meet to review, with analysts not expecting any changes ahead of the full OPEC+ meeting scheduled for June 1.
The Reuters survey showed the largest drops in output in March coming from Iraq and Nigeria. In February, Iraq was producing oil at a rate open its OPEC quota and had pledged to reduce output for March, while in Nigeria, exports have fallen due to the launch of a new Nigerian refinery that is taking in more product domestically.
