Oil Price Falls To $86 Per Barrel

Despite efforts made by the Organisation of Petroleum Exporting Countries (OPEC) to stabilise the cost of the commodity, the global benchmark for crude dropped in price on Sunday as virtually all oil grades witnessed reduced prices on the first day of the week.

Data obtained from the September 2022 Oil Market Report of OPEC shows that an oil rig in Nigeria was dormant in August 2022 when compared to the number of functional rigs in the preceding month.

Industry figures seen in Abuja on Sunday showed that Brent dropped in price by $4.31 or 4.76 per cent to $86.15/barrel as of 4.18 pm Nigerian time.

WTI crude lost $4.75 or 5.69 per cent to close at $78.74/barrel, while the cost of oil grades in OPEC Basket dropped marginally by $0.24 or 0.25 per cent to close at $96.31/barrel.

The number of functional rigs in Nigeria as of August as stated in the data released by OPEC’s World Rig Count reduced from 11 in July to 10 in August.

According to the organisation, the average number of functional oil rigs in Nigeria in 2019 was 16, it, however, dropped to 11 in 2020, before eventually crashing to seven in 2021.

In the first and second quarters of 2022, the average number of Nigeria’s functional oil rigs was put at eight and 10 respectively.

OPEC’s data indicated that the functional rigs increased to 11 in July this year, but this was not sustained, as it again dropped to 10 in August.

The major reason for the dormancy or halt in the operations of Nigeria’s oil rigs was the alarming rate of crude oil theft.

The Federal Government, oil unions, and military, among other stakeholders, have repeatedly expressed concerns about this.