The price of Nigeria’s premium grade, Bonny Light, hit $80. 73 per barrel, over recovery from the coronavirus pandemic, less drilling by US shale producers and supply disruption following hurricanes in the Gulf of Mexico and fast-rising demand, which left stored natural gas stocks well below the five-year average.
Brent, the international benchmark, rose to $82.59 a barrel early on Tuesday, hitting a three-year high for the second consecutive day, as North American benchmark West Texas Intermediate price spiked to $78.90 per barrel also.
Analysts said that the soaring price, with the front-month contract up almost 200 per cent in a year.
“The price could go much higher if the weather is as cool this winter as some people predict,” said Andrew Gillick at energy consultancy Enverus. Soaring energy prices in the US have already sparked some White House concern, with President Joe Biden calling earlier this month for an investigation into why average petrol prices — up almost 50 per cent in the past year to about $3.19 a gallon — are so high.
Recall that who spoke to Vanguard had projected further rise to $90 per barrel, from $78 in the global market.
An energy analyst with Goldman Sach Group, Damien Courvalin, said: “While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts.
“Brent could hit $90 a barrel by year-end as the market is in a bigger deficit than many realise.
“This deficit will not be reversed in coming months, in our view, as its scale will overwhelm both the willingness and ability of Organisation of Petroleum Exporting Countries, OPEC+ to ramp up.”
Also, an energy expert Dr Bala Zaka, said: “With the successful vaccination and other initiatives against the coronavirus pandemic, there are indications that the demand for crude oil would continue to increase, thus causing prices to rise.