Oil price drops to $86 a barrel

Please share this story:

The price of Brent crude, the global benchmark for crude oil, fell on Sunday as virtually all grades of oil saw prices drop on the first day of the week despite efforts by the United Nations. oil-exporting countries to stabilize the cost of the commodity.

As oil prices fell, data obtained from OPEC's September 2022 oil market report indicated that an oil rig in Nigeria was idle in August 2022 compared to the number of functional platforms in the previous month.< /p>

Industry figures seen in Abuja on Sunday showed the price of Brent fell $4.31 or 4.76% to $86.15/barrel at 4:18 p.m. Nigerian time.

WTI crude fell $4.75 or 5.69% to close at $78.74/barrel, while the cost of oil grades in the OPEC basket fell slightly down $0.24 or 0.25% to close at $96.31/barrel.

OPEC's World Rig Count data on operational rigs in Nigeria as of August this year indicates that the number of operational rigs in the country increased from 11 in July to 10 in August.

The organization said that in 2019, the average number of functioning oil rigs in Nigeria was 16, but fell to 11 in 2020, before falling to seven in 2021.

During the first and second quarters of 2022, the average number of operating oil rigs in Nigeria was eight and 10 respectively.

OPEC data indicated that the number of functional rigs increased to 11 in July this year, but this was not sustained as it fell again to 10 the following August.

The main reason for the inactivity or shutdown of oil rigs in Nigeria was the alarming rate of crude oil theft.

The federal government, oil unions, the military, among other stakeholders, have repeatedly expressed concerns about this.

The Petroleum and Natural Gas Senior Staff Association of Nigeria, for example, recently said that some oil companies have had to shut down some of their oil wells due to the persistent theft of crude oil.

PENGASSAN also said that the military should be forced to explain how huge volumes of oil were stolen from the Niger Delta despite the protection of oil installations by their personnel.

The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, told our correspondent that while there may be inconsistencies in the data on the oil theft, the volume of crude stolen in the country was huge.

He said, "On the amount of oil stolen in Nigeria, the various figures you see are all estimates. There is no precise gauge to measure the volumes of stolen crude oil in this country, because we do not have a standard measurement system.

"But due to the recent incident of a vessel being intercepted for allegedly attempting to steal crude oil from Nigeria, we believe that a measurable amount of our crude oil is not counted."

He added, "I also know that Nigeria is losing a lot of revenue because of this oil theft and the stakeholders are not happy with the way the cartel involved is handling the matter.

"So it is relevant that the federal government should come up with a standard measuring instrument that will show the exact number of daily production, export consumption and reserved amount, as well as what we channel for a local use.”

PENGASSAN recently held protests in Abuja, Lagos, Kaduna, Warri, among others, to address the continued theft of crude oil in Nigeria.

Furthermore, the Executive Secretary, Nigeria Extractive Industries Transparency Initiatives, Ogbonnaya Orji, said in an interview that the 2021 Petroleum Sector Audit Report will be ready this year to determine the level of theft of oil across the country.

"We want to establish how much crude is produced, how much can be accounted for and how much has been stolen," he said.

Orji added: "We should establish how much was exported, reserved for local consumption and how it was reserved or managed."