Crude Oil Prices Fall to Lowest Since December 2021, Nigeria’s Benchmark Slumps Below $70

•Nigeria raises crude production to 1.44 million bpd in August, highest since January

•Glencore’s ex-head of oil appears in UK court for bribing Nigerian officials

Emmanuel Addeh in Abuja

Oil prices have plummeted to their lowest point in about  three years, with Brent Crude, Nigeria’s benchmark, falling to less than $70 per barrel and US West Texas Intermediate (WTI) dipping below $66.04 yesterday.

Brent crude futures settled at their lowest since December 2021, after the Organisation of Petroleum Exporting Countries (OPEC) revised down its demand forecast for this year and 2025.

Brent crude futures settled down $2.65, or 3.69 per cent, at $69.19 a barrel. US West Texas Intermediate (WTI) crude settled down $2.96, or 4.31 per cent, to $65.75 a barrel.

Both benchmarks dropped by more than $3 during the session, after each rose by about 1 per cent on Monday. WTI crude futures fell more than 5 per cent on Tuesday, hitting their lowest levels since May 2023.

On Tuesday, OPEC in a monthly report said world oil demand would rise by 2.03 million barrels per day (bpd) in 2024, down from last month’s forecast for growth of 2.11 million bpd.

Until last month, OPEC had kept the forecast unchanged since it was first made in July 2023. OPEC also cut its 2025 global demand growth estimate to 1.74 million bpd from 1.78 million bpd. Prices slid on the weakening global demand prospects and expectations of oil oversupply.

This means that crude oil prices are down by over 26 per cent from their multi-year highs of $98 per bbl and the downtrend will support, it was learnt.

The situation is double edged sword for Nigeria. While it may get petrol imports for lower prices in the coming months, however, its expectation of an $77 per barrel oil in this year’s budget could be a mirage.

This means that for the first time since December 2021, Brent crude oil futures dipped below $70 per barrel, signalling a significant slump driven by rising supply, waning demand, and a wave of speculative selling.

The drop in oil prices also poses a significant challenge for the federal government, which based the 2024 budget on a crude price benchmark of $77 per barrel.

Worse still , Nigeria has consistently failed to meet its oil production targets for the 2024 budget set at 1.7 million barrels per day (bpd), as well as the Organisation of Petroleum Exporting Countries (OPEC) quota of 1.58 million bpd. In July OPEC data showed that Nigeria’s production averaged just 1.35 million bpd.

But in a major breakthrough, Nigeria produced its highest oil production since January in august , according to data from OPEC released yesterday, with output hitting 1.44 million bpd as against the previously highest output of 1.42 million bpd in January 2024.

OPEC data released indicated that the new production figure was about 57,000 bpd higher for the month under consideration, according to secondary sources.

Meanwhile, Glencore’s former head of oil Alex Beard appeared in a London court yesterday to face bribery charges relating to the Swiss commodity trader’s operations in Africa, Reuters reported.

Beard will plead not guilty, his lawyer said at London’s Westminster Magistrates’ Court.

The 57-year-old is charged with two counts of conspiracy to make corrupt payments to government officials and officials of state-owned oil companies in Nigeria between 2010 and 2014, and in Cameroon between 2007 and 2014.

Beard, who is the most high-profile commodity trader to have been charged in Britain for alleged corruption, joined Glencore in 1995 from BP, the biggest trading desk at that time, and was head of oil from 2007 until 2019, when he retired.

He helped Glencore become one of the top three oil trading firms, trading as much as 7 per cent of the world’s oil in its heyday.

Four other ex-Glencore employees – Andrew Gibson, Paul Hopkirk, Ramon Labiaga and Martin Wakefield – were also charged with making corrupt payments relating to Glencore’s operations in Nigeria, Cameroon and Ivory Coast.

Gibson and Hopkirk indicated not guilty pleas through their lawyers. Labiaga and Wakefield did not indicate any pleas and were not required to do so.

Gibson and Wakefield are further charged with conspiracy to falsify documents between 2007 and 2011.

Another ex-Glencore employee, David Perez, has been charged with making corrupt payments and conspiracy to falsify documents. Perez did not indicate any pleas.

Prosecutor Alexandra Healy said the alleged offences related to the West Africa desk of Glencore’s London office. All six defendants’ cases were sent to Southwark Crown Court for a hearing on October 8.