By Ikenna Omeje
The Organization of Petroleum Exporting Countries (OPEC) crude, also known as OPEC Reference Basket (ORB) of 13, gained 12 percent, or $6.67, to average $61.05 per barrel in February – the highest value since January 2020.
The ORB is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
According to the OPEC Monthly Operational Report for March, the largest global crude oil cartel said that the component value of its crude improved along with relevant crude oil futures and physical benchmarks, especially in Asia and the United States markets.
Also in the month under review, OPEC said that the price of West Texas Intermediate (WTI) increased by 13 percent – its highest since January 2020, while Brent crude rose by $6.96, or 12.6 percent, to average $62.28.
OPEC noted that the benchmarks were supported by ongoing improvements in oil market fundamentals and a futures market that remains positive in anticipation of demand recovery and restrained global oil supplies.
“Spot Crude benchmarks North Sea Dated and WTI surged by more than 13 percent in February to their highest monthly average since January 2020. The benchmarks were supported by ongoing improvements in oil market fundamentals and a futures market that remains positive in anticipation of demand recovery and restrained global oil supplies. Oil prices extended gains after a supply disruption in the US following an energy crisis sparked by severe winter weather.
“The OPEC Reference Basket (ORB) increased sharply for the fourth consecutive month in February, increasing by 12.3%, or $6.67, to reach $61.05/b, its highest value since January 2020. ORB component values improved along with relevant crude oil futures and physical benchmarks, and monthly changes in their respective official selling price differentials, specifically towards Asia and US markets.
“Crude oil futures prices extended their rally in February, hitting 13-month highs, supported by optimistic assumptions about tightening supply/demand fundamentals, and bolstered by the extreme weather in the US that caused a sharp decline in oil production. The market sentiment remained positive about the progress towards more US economic stimulus that should boost the economy and oil demand, plus anticipation of a rapid recovery to pre-COVID-19 normality. The Brent front month rose by $6.96, or 12.6 percent, in February to average $62.28/b, and WTI increased by $6.96, or 13.4 percent, to average $59.06/b. ICE Brent was 97¢ lower year-to-date (y-t-d), or 1.6 percent, at $58.80/b, while WTI was $1.37 higher, or 2.5 percent, at $55.58/b, compared to the same period a year earlier,” it said.
On global oil demand, OPEC said, ”World oil demand in 2020 shows a contraction of 9.6 mb/d, to stand at 90.4 mb/d. OECD oil demand contracted by 5.6 mb/d, while non-OECD demand declined by 4 mb/d. For 2021, world oil demand is expected at 5.9 mb/d, to stand at 96.3 mb/d. Oil requirements in 1H21 are adjusted lower, mainly due to extended measures to control COVID-19 in many key parts of Europe. In addition, elevated unemployment rates in the US slowed the recovery process. In contrast, oil demand in 2H21 is adjusted higher, reflecting expectations for a stronger economic recovery with the positive impact of vaccination rollouts. In regional terms, OECD oil demand is expected to increase by 2.6 mb/d in 2021 to stand at 44.6 mb/d, while non-OECD demand is seen rising by 3.3 mb/d to average 51.6 mb/d.”
According to the report, Nigeria’s total crude oil production per day for the month stood at 1.424 million barrels, as against 1.361 million barrels the country produced in January.