• Tuesday, July 23, 2024
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Nigeria, S. Arabia see bounce for oil price after turbulent first half


Nigeria and Saudi Arabia believe current oil prices are not sustainable and forecast a better turn for the crude exporting countries by the second half of this year as Brent traded above $30 a barrel in Friday’s trading in Europe.

Khalid al-Falih, chairman of Saudi Arabia’s state oil company Aramco, told the World Economic Forum inDavos that current prices could not last, with many smaller producers facing financial difficulties.

 “The market has overshot on the low side and it is inevitable that it will start turning up,” said Mr Falih, predicting higher prices by the end of the year.

According to Nigeria’s Petroleum Resources Minister of State Emmanuel Kachikwu “the second half of this year holds more promise.”

“Everybody is agreed on one thing: prices today are not good enough,” Kachikwu said.

Both men spoke yesterday at the World Economic Forum in Davos and most of the oil executives and representatives of energy-rich nations who met in a closed session in Davos agreed the market was oversupplied by about 1 million barrels a day and that lower spending on new projects would bring supply and demand into balance next year.

A surge in US shale output over the past five years has contributed to a global supply glut that has pushed oil prices down 75 per cent in 18 months. The sell-off has accelerated this year, with crude dropping 30 per cent as Iran, Saudi Arabia’s regional rival, prepares to re-enter the market after the lifting of sanctions.