Oil Price Falls to $86/Barrel

Brent, 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 despite efforts by the Organisation of Petroleum Exporting Countries to stabilise the cost of the commodity.

As oil prices plunged, data obtained from the September 2022 Oil Market Report of OPEC indicated 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 at 4.18pm 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.

Data from OPEC’s World Rig Count on operational rigs in Nigeria as at August this year indicated that the number of functional rigs in the country reduced from 11 in July to 10 in August.

The organisation stated that in 2019, the average number of functional oil rigs in Nigeria was 16, but this 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 the succeeding month of 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, military, among other stakeholders, have repeatedly expressed concerns about this.