Fuel Costs Set to Rise Again in Nigeria as Goldman Sachs Predicts $86 Crude Oil Benchmark
- Goldman Sachs has stated that global fuel prices will hit $86 by year-end
- It said demand for crude will increase, causing a deficit of 2 million barrels per day
- For Nigeria, the increase in the price of crude oil will bring both good and bad news
Goldman Sachs, a global investment banking, securities and investment management firm has forecasted that the demand for oil will reach an all-time high, creating a significant shortfall.
It anticipated that Brent crude now trading above $80 per barrel would jump to $86 per barrel by the end of the year.
Source: UGC
This follows Legit.ng's report that the Nigerian National Petroleum Company Limited has adjusted its pump price of Premium Motor Spirit, popularly called petrol from N537/litre to N617/litre.
The adjustments were spotted in some filling stations and the new prices has since been implemented across the country.
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More demand will push price
The investment bank anticipates that the unprecedented demand for oil will push up crude prices in the near future by as much as 2 million barrels per day.
In the second half the company said it expect pretty sizable deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high.
Goldman’s Head of Oil Research, Daan Struyven, told CNBC.
”We expect pretty sizable deficits in the second half, with deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high,”
How this affects Nigeria
According to recent information from the Organization of Petroleum Exporting Countries (OPEC), Nigeria continued to contribute to the reduction in global supply last month, recording a shortfall of about 500,000 barrels per day.
Nigeria was only able to drill about 1.25 million bpd in June, despite the fact that the nation's OPEC production quota is still 1.74 million bpd. The problem has been attributed by operators to widespread oil theft and vandalism.
The recent surge in gasoline prices is due to Nigeria's recent termination of its fuel subsidy program.
For Nigeria, the increase in the price of crude oil will bring both good and bad news. While it will raise its earnings from crude oil, the price at which the already uneasy populace must pay for gasoline at the pumps is also likely to rise.
Fuel Crisis Hits Nigerian Border Communities as Petrol Prices Skyrocket
Legit.ng earlier reported that the price of a litre of Premium Motor Spirit (PMS), generally known as gasoline, has increased to N1,000 in Ogun State's border areas.
While some parts of Abeokuta and other cities offer a litre of fuel for between N500 and N600, Daily Trust reports that inhabitants of border communities pay between N800 and N1,000 for the same commodity.
Source: Legit.ng
