OIL MARKET: Bonny Light price leaps on OPEC’s Report
By Eyo Nsima
The price of Nigeria’s Bonny Light has started to leap, due mainly to the latest favorable report of the Organization of Petroleum Exporting Countries, OPEC.
Specifically, the price of the crude, which had hovered at $66 per barrel last week rose to $68.44 per barrel, Thursday following the release of OPEC’s May 2021 report, which raised hope for increased market stability.
On-demand, the report, stated: “World oil demand is assumed to have dropped by 9.5 mb/d in 2020, unchanged from last month’s assessment, now estimated to have reached 90.5 mb/d for the year.
“For 2021, world oil demand is expected to increase by 6.0 mb/d, unchanged from last month’s estimate, to average 96.5 mb/d. Slower than anticipated demand in OECD Americas during 1Q21, together with the resurgence of COVID-19 cases in India and Brazil, caused the 1H21 oil demand data to be revised downwards.
“However, positive transportation fuel data from the US and acceleration in vaccination programs in many regions provides further optimism in 2H21. The assumed return to some degree of normality and improved mobility is also expected to positively affect regions such as the Middle East and Other Asia in 2H21.”
Nevertheless, on supply, the report, stated: “Non-OPEC liquids supply in 2020 is estimated to average 62.9 mb/d, a contraction of 2.5 mb/d y-o-y. Non-OPEC liquids supply for 2021 is revised down by 0.2 mb/d from last month’s assessment and is forecast to grow by 0.7 mb/d to average 63.6 mb/d. This mainly due to the US liquids production outage of 2.2 mb/d seen in February, following the winter storms and freeze. Moreover, the supply forecast in Norway and Canada was also revised down, due to extensive seasonal maintenance.”
It added: “The main drivers for supply growth in 2021 are anticipated to be Canada, Brazil, China, and Norway, while US liquid supply is expected to decline by 0.1 mb/d y-o-y. OPEC NGLs are forecast to grow by around 0.1 mb/d y-o-y in 2021 to an average of 5.2 mb/d, following an estimated contraction of 0.1 mb/d in 2020. OPEC crude oil production in April increased m-o-m by 0.03 mb/d, to average 25.08 mb/d, according to secondary sources.”