Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Mele Kyari has said the supply crisis affecting the natural gas market could push oil prices higher.
Gatekeepers News reports that Kyari said oil prices could jack up by $10 a barrel over the next three to six months as energy consumers are forced to shift from gas to other fuels.
Kyari, in an interview with Bloomberg Television on Wednesday, said: “You wouldn’t be very wrong if you said you’d see an additional $10 on a barrel.”
Brent crude traded above $75 on Wednesday, having increased about 45% this year.
Kyari said demand may climb by 1 million barrels a day, or slightly more than 1 percent of global consumption.
Gas prices skyrocketed this month in Europe and Asia to the equivalent of around $155 per barrel of oil. This, is due to the shortages of coal and wind power that have forced governments to ramp up gas purchases to run their electricity plants.
Kyari, at Gastech, a major conference for the gas and hydrogen industries, noted that prices will probably remain at record levels of around $25 per million British thermal units for months and perhaps go even higher.
The NNPC boss stated that Nigeria is also facing challenges in maintaining exports of liquefied natural gas. Kyari added that there will be “slippages” with Nigerian LNG cargoes in 2022 and possibly this year too because of shortages at local gas fields.
“We have to do something quick,” he said.
Kyari told reporters separately that the supply issues will be resolved by mid-2022.
According to Bloomberg’s data, Nigeria was the world’s sixth-biggest LNG exporter in 2020.
Kyari noted that most of the problem with global supplies is down to fossil fuel projects having stalled, as activists and investors urge companies to accelerate a switch to cleaner energy.
Gatekeepers News reports that the NNPC MD’s comments echoed the sentiments of OPEC’s top official and the energy ministers of Qatar and the United Arab Emirates, all of who said on Tuesday that the crisis showed the need for more investments in oil and gas.
“There’s a euphoria around the energy transition that’s forcing companies not to invest,” Qatar’s Saad Al-Kaabi said. “People should not forget that new investments are needed to just keep output sustained.”
