Oil prices set for $105 on demand growth

• Published date: 11 January 2023
• Publication title: Nigeria - The Nation

SOLID growth in global oil demand is set to drive oil prices to above $100 this year and Brent Crude could trade at $105 per barrel by the fourth quarter.

Also, global oil demand is set to increase by 2.7 million barrels per day (bpd).

However, the oil market is expected to return to deficit in the second half of the year.

China's re-opening and the huge crude oil import quotas just allocated to private refiners in the country, the world's largest crude oil importer signal expectations that Chinese demand is set for a rebound once the exit COVID wave wanes, analysts have said.

A surge in oil prices could be of benefit to Nigeria, Africa's largest oil producer and member, Organisation of Petroleum Exporting Countries (OPEC) which needs cash to fund its N21.8 trillion Budget 2023 with crude oil benchmark increased to $75 per barrel from the previous $70 per barrel, while oil production was pegged at 1.69 million barrels per day (bpd).

According to its latest crude oil and condensate production data for last December, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said production had increased in December last year to an average of 1.23 million bpd from 1.18 bpd in the previous month; the highest in nine months.

Oil prices had jumped by four per cent Monday after China's borders reopened this weekend-after almost three years. Market participants focused - at least for a day - on brighter...