The slump in the U.S crude below $0 per barrel is
not a reflection of the realities in the global oil market capable of impacting
Nigeria’s oil production, the Group Managing Director (GMD) of the Nigerian
National Petroleum Corporation (NNPC), Mallam Mele Kyari, has said.
Last Monday, the U.S crude oil price dropped to its worst level since New York
Mercantile Exchange (NYMEX) opened oil futures trading in 1983.
The drop, coming a few days after Nigeria’s benchmark crude oil grade – Bonny Light – slumped to an average $12-$13 per barrel, heightened apprehension about Nigeria abandoning oil production amid declining prices.
Despite the recent intervention by the Organization of Petroleum Exporting Countries (OPEC) and its allies, led by Russian, to cut global crude oil, no significant improvement has emerged in the oil market.
With crude oil prices on a downward swing, market analysts say the record output cuts by OPEC+ expected to take effect from May 1, needs some time to rebalance the market.
But Kyari was quoted as saying on Tuesday that Nigeria has no cause to be apprehensive over the current situation, as the US $0 price has no capacity to impact Nigeria’s oil production.
“That is not real crude oil price. That is the traders’ paper figure just showing the detail at the close of their business for the month. You would have observed that it has changed this morning (Tuesday). This is because they are not sure of the storage facilities for their stock of products they have,” the NNPC boss said.
He said the situation, which reflects the current position in the U.S market, does not have any direct impact on the price of the Brent crude oil blend, which rose to about $28 per barrel before dropping to the current price of to $26.24 a barrel on Tuesday.
“Usually, the spread between OPEC price and the other prices vary by about $8 to $9. When that is deducted from the prevailing price, we have the real price in the market. But, today, Brent is about $28 per barrel. If $8 or $9 is deducted, we will know what the real price is today.