Profit margins for Nigerian oil per barrel have increased slightly in London trade on Monday, continuing the upward trend that began last week when prices surged by almost 4%.
Gatekeepers News reports that it is believed that the supply is contracting and the possibility of additional attacks on Russian energy infrastructure is raising concerns, which has led to this increase in oil prices.
At the time of this report, the May delivery of Brent crude oil futures increased by 40 basis points to $85.66 a barrel. The April contract for U.S. West Texas Intermediate was up 0.5 percent at $85.74 per barrel on trade.
It is worth noting that the capital and operating costs associated with producing Nigerian crude have risen steadily, hitting previously unheard-of heights of more than $48 per barrel. This is a significant difference compared to the costs of oil production in other countries, such as $9 in Saudi Arabia, $21 in Norway, or $24 for US shale oil.
Despite Nigeria’s widespread problems with theft and sabotage, a concerted effort to crack down on targeted attacks and organized theft rings has led to Nigeria’s oil production reaching its highest level in more than three years.
However, Nigeria has continuously fallen short of the OPEC+ agreement’s production quota. Nigeria proposed an audacious daily crude oil production of 1.78 million barrels in its 2024 budget while OPEC pegged its production at 1.5 million barrels per day.
Oil theft and pipeline vandalism have long been problems for Nigeria’s upstream oil and gas sector, forcing majors to leave the nation and frequently leading to force majeure at the country’s main export terminals for crude oil.
Private security companies were hired by the Federal government to support military efforts to guard facilities as part of an aggressive and more effective strategy to combat theft and pipeline sabotage. Despite a decline on Friday, both benchmark oil contracts posted gains for the previous week.
For most of the past month, oil prices have been rangebound, but on Thursday, the International Energy Agency released a bullish demand report that caused prices to rise to their highest point since November.
The Houthi attacks in the Red Sea forced fuel and crude carriers to reroute, lowering the amount of oil available to users. This was the fourth time since November that the agency strengthened its demand outlook.
