The price of Nigeria’s premium oil grade, Bonny Light continued to surge high yesterday at the international market, selling at $89.73 a barrel as at 18:00 GMT from $88.24 the previous day.
This shows an increase of $1.49 or +1.69 percent as the market shrugged off the unexpected build in US crude stocks, while investors continued to focus on the looming supply crunch.
Brent Crude traded at $88.95 a barrel (18:00 GMT), compared to Wednesday’s $88.44 a barrel, which is an increase of $0.51 or +0.58 percent
At the same time, WTI crude traded at $87.65 a barrel, against $86.96 a barrel the previous day, an increase of $0.69 or +0.79 percent
Markets were lower for most of the day following the rise in US crude and gasoline stocks last week, according to the delayed American Petroleum Institute figures released late Wednesday.
Crude stocks rose by 1.4 million barrels for the week ended January 14. Gasoline inventories rose by 3.5 million barrels, although distillate stocks fell by 1.2 million barrels.
“It shouldn’t be too surprising to see the market taking a breather after the scale of the move we have seen so far this year. API data overnight was also softer than expected, with a surprise crude oil build,” said ING in an investor note.
This week’s bullish reports from OPEC, the IEA, and Goldman Sachs continued to underpin sentiment, as dwindling spare capacity and production outages kept the focus on the supply side.
“Besides the surging omicron having a much smaller negative impact on global consumption it’s the realization that several countries within the OPEC+ group are struggling to raise production to the agreed levels that have been driving the energy sector futures higher in recent weeks,” said Ole S Hansen, Head of Commodity Strategy at Saxo Group.
Geopolitical concerns were also boosting prices after this week’s drone attack on the UAE, while ongoing tensions between Russia and Ukraine could lead to further sanctions against Russia.
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US President Joe Biden has said he thinks his Russian counterpart Vladimir Putin will “move in” on Ukraine but does not want “full-blown war”.
He told Wednesday’s news conference that President Putin would pay a “serious and dear price” for invading, but indicated a minor incursion might be treated differently.
The market also found underlying support on news that China imported a total of 10.865 million BPD in December, its highest since March and up significantly from the three-year low of 8.9 million BPD in October.
