Nigeria plans to boost oil output as price hits $65
Nigeria and is planning to raise output in the new year as oil price hits $65, the highest in 30 months.
Brent crude prices jumped above $65 per barrel after the shutdown of the Forties North Sea pipeline knocked out significant supplies from a market that was already tightening due to OPEC-led production cuts.
Brent crude’s international bench mark was at $ 65.07 a barrel at 0211 GMT.
U.S. West Texas Intermediate (WTI) crude futures were at $58.21 a barrel.
Britain’s Forties oil pipeline, the country’s largest at a capacity of 450,000 barrels per day (bpd), shut down on Monday after cracks were revealed.
“The market reaction shows that in a tight market, any supply issue will quickly be reflected in higher prices,” said ANZ bank.
The jump in Brent prices widened its premium to WTI prices, making U.S. oil exports more attractive
Total said at the weekend that its new Egina field offshore Nigeria was on track to start in 2018, adding 10 per cent to the country’s production.
The field will have a capacity of 200,000 barrels per day (bpd) and launch in the fourth quarter of 2018, counterbalancing production constrained by aging pipelines, perpetual theft and sabotage.
“That could certainly change the dynamics,” said Ehsan Ul-Haq, head of crude and products at Resource Economist, a consultancy.
The Nigerian petroleum ministry did not respond to a request for comment on the Egina field startup, and whether production elsewhere would be curtailed as a result.
The headline of a statement issued by Nigeria’s petroleum ministry on the day of the OPEC meeting stressed, in block capitals, that Nigeria and Libya were exempt from cuts.
Oil Minister Emmanuel Ibe Kachikwu emphasised in the statement that the nation’s condensates, a form of ultra-light crude, were exempt from any total, giving it leeway in calculations.
He added that there was “no obligation” to do anything.
Oil production from Nigeria and Libya has averaged 1.7 million bpd and 900,000 bpd this year according to Reuter’s assessments.