Crude oil prices yesterday hit the highest in two years as Organisation of the Petroleum Exporting Countries (OPEC) experienced highest-ever conformity with voluntary production adjustment.
The 24 participating countries of the 'Declaration of Cooperation', signed on December 10, 2016, showed joint conformity of 116 per cent, the highest level reached since the declaration came into effect at the beginning of 2017.
Brent crude oil futures traded for $62.33 a barrel after hitting a session peak of $62.90, representing a 28-month high.The West Texas Intermediate (WTI) crude oil hit $55.89 cent, breaking above $56 a barrel for the first time since July 2015.With Nigeria's crude oil benchmark in this year's budget set at $44.50 and at Brent current price of $62.33, the nation will be saving $17.83 per barrel.
Meanwhile, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said that he expects oil prices to remain stable in 2018.He said he was optimistic about 2018, looking at the current depletion of reserves and the slowing rate of United States (U.S.) tight oil growth, as well as the positive performance in terms of conformity with the 'Declaration of Co-operation.'
"It all leads to the fact that 2018 should be okay. "A lot of us are going through very difficult times in our economies, and we need the volumes. But if you get the volumes, you lose the price.
"I think we are all committed to staying the course. We are going to do everything we need to do to make sure it works, and I think that 2018 will respond appropriately."
Kachikwu, who stated that the nation had already been contributing to the stabilisation of the market, further said: "A lot of work has been done to improve the security situation in the Niger Delta. Confidence in the system is building, and the economy is coming back.
"The reality is that for nearly two years, Nigeria has contributed all the volumes needed to stabilise the market. We had below one million barrels out of the market completely. Everyone benefited from that, but we are suffering."
He, therefore, supported the process that had been built up within OPEC to deal with the oil market crisis over the past year, including OPEC and non-OPEC talks and the building of a monitoring mechanism, saying: "First, I like the concept; it brings confidence to the market. Above and beyond the usual resolutions we have in our general assemblies, we have been able to put an enforcement team behind it. I think it's a model that we will always adopt going forward once things begin to fall out of place. I think it has worked very well for everybody."