The uncertainties in the international oil market may accentuate soon with some shale producers resuming production after oil prices assumed a rising trend experienced last month.
Already, the crude oil prices recorded a two per cent fall yesterday as data showing higher Middle East oil production and record hedge fund buying sparked profit-taking on the outsized rally.
Brent benchmark was down $1.05 at $46.32 per barrels as West Texas Intermediate (WTI) closed at $45.12, OPEC 13 crude basket was $42.70 per barrel.
Meanwhile, the respite in fuel supply recently enjoyed by Nigerians may be fading away as the product still sells for N130 per litre at the retail outlets depending on the location.
As the prices continue to rally, oil producers are optimistic and they are at a “comfortable level”, even as the shale oil producers resume production and other increasing output to the market.
The prices were said to be rising due to production cuts in some OPEC member countries including Nigeria, while the U.S dollar continued to fall.
Pioneer, a U.S shale producers, stated that it was “expecting to deliver production growth of over 12 per cent in 2016 compared to the company’s previous production growth target of 10 per cent,” adding that it also expected to “add five to 10 horizontal drilling rigs when the price of oil recovers to approximately $50 per barrel and the outlook for oil supply/demand fundamentals is positive.”
Another U.S. shale giant, Whiting Petroleum, who admitted that $45 oil is good enough, disclosed that it would “increase its production forecast to a range of 131,400 barrels per day (bpd) to 136,900bpd”.
It added that “with the majority of completions scheduled for the second half of the year, the company expects to realize the full production benefit in late 2016 and 2017.”
It was learnt that the Petroleum Tanker Drivers (PTD) arm of the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) may bé contributing to the fuel supply logjam as it continued to extort the marketers for loading products from the depots.
Investigations revealed that the the union is now collecting N1per litre illegally on every litre loaded from various depots in Apapa axis.
Besides, a significant number of the depot operators are still selling between N100 and N105 per litre.
This situation, according to the marketers has triggered the cost of purchase from depots and forced them to sell above N87 official price.
With this development, statistics showed that each marketer will bé paying additional N33,000 on every 33,000 litres (one truck) of Premium Motor Spirit (PMS), after paying the official union due of N19,500 on every loading.
For example at Folawiyo and NIPCO depot in Apapa, the union members are strictly gating the marketers from assessing product except after paying the illegal fee.
“So, if i have paid all these fees, and i have bought product for N105 per litre, how can i sell for N87 per litre when it gets to my filling station? Many people did not see all these anomalies but we are appealing to the appropriate agencies to help checkmate these people so that fuel can be available at normal prices,” a source said.
The South West Chairman, NUPENG, Tokunboh Korodo, could not comment on the matter as press time yesterday, and was neither picking calls nor responding to text messages.
However, survey in Lagos and Ogun States metropolis showed that many filling stations were selling fuel at between N100 and N130 per litre.
The few compliant stations that were selling at N86.50 per litre had long queues while their attendants collect extra N100 from customers.
Many were still rationing, while others kept on hoarding.
Operations at the black market were however on low ebb, especially in Lagos, with improved supplies to the filling station. The fuel price at the black markets was however around N160 a litre.
However, the Petroleum Products Pricing Regulatory Agency (PPPRA) template issued on April 28 showed N12.62 subsidy on every imported product.
With the crude oil prices at the international market rising to $47.36 per barrel, the expected open market price locally (landing cost plus margin) is N98.62 per litre, on the template.