MON, 09 MAY, 2022-theGBJournal | Last week, the price of Brent rose by 2.79%, its second consecutive weekly gain, to close at US$112.39/bbl, its highest level since 18 April. As a result, Brent is up 44.50% year-to-date and has traded at an average of US$100.44/bbl, 41.69% higher than the average of US$70.89/bbl in 2021.
Oil prices extended gains on the back of the EU’s proposal to phase out purchases of Russian crude oil, as well shipping and insurance services for transporting it. So far, the proposal has been hindered by internal disagreements on the phasing-out timeline as countries like Hungary and Slovakia seek exemptions.
Elsewhere, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) maintained the decision to increase their June 2022 production target by 432,000 bpd. This has led to the US Senate Judiciary Committee approving the passage of the “No Oil Producing and Exporting Cartels” (NOPEC) bill that could open OPEC+ members to antitrust lawsuits over collusion to raise global crude oil prices.
Against this backdrop, Coronation Asset Management research analysts say their view is unchanged-Brent is likely to stay well above the US$60.00/bbl mark for several more months.
‘’We choose this US$60.00/bbl benchmark because historically, as a general rule, Nigeria’s public finances have been strong when oil prices exceeded it.’’
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