Oil price determination is more a geopolitical arrangement than market forces function and it could be the catalyst to bringing down the price of oil to as low as $60 per barrel.
The keynote speaker at the Nigerian British Chamber Of Commerce (NBCC)’s 2022 Economic Outlook held January 13, 2022, made this submission while giving his presentation in the hybrid event.
In furtherance, Bismarck Rewane, Managing Director and Chief Executive Officer (CEO), Financial Derivatives Company Limited, said “the increment in the United States of America’s (U.S) interest rates make the dollar (USD) stronger, leading to the drop in USD denominated commodities.
“The U.S is fully aware that Saudi-Arabia and Russia is the key to the price of oil and the democrats know that it will be suicidal to let the price of oil go above $70 per barrel in any way form and manner.
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“We all believe in market forces and even though there is a blend, in reality, the control of the price of oil is more a function of geopolitical arrangements than market forces,” he said.
Meanwhile, Rewane also gave insight on how to make oil prices $60 per barrel in the international market.
“It will be in the interest of everybody to bring down the price of Premium gasoline in the U.S to at least $3 per gallon, coupled with a round deal to achieve this feat.”
However, he also talked about what it could mean for the Nigerian economy.
“The reason why the price of oil is currently like this is that we are holding back 5 million barrels but now there is a new OPEC Secretary who is not a Nigerian.
“Therefore, I think that the forces suggest that the price of oil could easily go to $60 per barrel, and if that happens, Nigeria will have to match up and be more efficient.”
