Crude oil price rose on Wednesday towards $59 per barrel to sustain Tuesday’s rallies where it gained one per cent after the Saudi Energy Minister, Khalid al-Falih, said the focus remained on reducing oil stocks in industrialised countries to their five-year average.
The minister’s statement had raised the prospect of prolonged output restraint once the supply-cutting pact led by the Organisation of Petroleum Exporting Countries (OPEC) ends.
This is coming as the Nigerian National Petroleum Corporation (NNPC) has restated the commitment of the country to exit petroleum products importation in the medium term and urged downstream operators to invest heavily in retail outlets to take advantage of the potential opportunities.
Oil prices have maintained multi-week highs with Brent crude at $58.41 per barrel, and US crude at $52.46.
Khalid al-Falih told Reuters at an investor conference in Riyadh on Tuesday that global oil demand was expected to grow by 45 per cent by 2050 despite an international push for using more renewable sources of energy.
OPEC, Russia and nine other producers, have cut oil output by about 1.8 million barrels per day (bpd) since January. The pact runs to March 2018 and they are considering extending it.
In a related development, the NNPC has restated that Nigeria would exit petroleum products importation in the medium term and called on downstream operators to invest heavily to take advantage of the commercial opportunities.
A former Executive Secretary of Petroleum Products Pricing Regulatory Agency (PPPRA), Mr. Reginald Stanley, said in his remarks that when he championed the entry of independent marketing companies in the distribution of petroleum products as a young graduate in the NNPC in the 1980s, the oil majors that had dominated the downstream business opposed him.