Reuters Poll: OPEC Cuts, China Demand to Steer Oil Towards $90 by Year-end

*Exxon resumes operations after labour dispute ends

Emmanuel Addeh in Abuja with agency report

Oil prices will pick up pace towards $90 a barrel over the course of this year as production cuts by the Organisation of Petroleum Exporting Countries (OPEC) and allies as well as rebounding China demand, a Reuters poll showed at the weekend.

A survey of 40 economists and analysts forecast Brent crude would average $87.12 a barrel in 2023, up from the $86.49 consensus in March and current levels of around $78. The global benchmark has averaged around $82 per barrel so far this year.

West Texas Intermediate (WTI) US crude is projected to average $82.23 a barrel in 2023, up from the previous month’s $80.88 consensus, the report added.
At the beginning of April, the OPEC and allies including Russia, a group known as OPEC+, surprised the market with an announcement of further oil output cuts of around 1.16 million barrels per day (bpd).

Western sanctions on Russian oil are also expected to keep supply tight, challenging global fuel demand growth seen at about 1 million-2.2 million barrels per day in 2023, according to the poll, with more than half of the upside coming from the world’s No. 2 oil consumer China.

A return above $100 a barrel seems unlikely, most analysts said, owing to growing fears of recession in the United States and Europe.
Nigeria’s benchmark, Brent is expected to average at $90.72 in the final quarter of this year, up from $85.78 and $88.86 in the previous two quarters, the poll showed.

In the meantime, Exxon Mobil has resumed operations at its facilities in Nigeria after resolving a labour dispute over pay and conditions with its in-house union, a company spokesperson said.
The industrial action had forced Exxon to declare force majeure on oil lifting at its terminals in the country.
A spokesperson for Exxon said in email responses that its three ventures, Mobil Producing Nigeria Unlimited, Esso Exploration and Production Nigeria Limited, and Esso Exploration and Production (Offshore East) Limited were now operating at normal levels.

“This follows the discontinuation of the industrial action earlier embarked upon by our in-house workers union,” the spokesperson said.
Earlier, Nigeria’s state-owned oil firm, the Nigerian National Petroleum Company Limited (NNPC) said in a statement it had helped end the labour dispute at Exxon Mobil after a pay adjustment acceptable to the union and Exxon was agreed.

NNPC, which runs joint ventures with oil majors, including Exxon, said the dispute was “effectively constraining 300,000 barrels of oil production daily”.
Nigeria is targeting 1.8 million barrels per day (bpd) by year-end from 1.6 million bpd, a Reuters report stated.