Crude grade price from Nigeria appreciated above $70 per barrel, marginally higher than the major oil contracts traded on the global oil market.
Major oil contracts reached a two-week high yesterday after fresh Houthi attacks on shipping in the Red Sea raised concerns over supply disruptions. On Tuesday, four crew members aboard the Greek-operated, Liberian-flagged bulk carrier Eternity C were killed by drones and speedboats off Yemen’s coast, according to Reuters.
Nigerian oil blends, which included Bonny Light, Brass River, and Qua Iboe, settled at $72.3 a barrel on Tuesday, $2.7 below the federal government’s benchmark for Crude.
Oil prices dipped slightly during Wednesday’s session, mainly because of an uptick in US crude inventory levels. Oil traders also remained cautious ahead of upcoming tariff announcements from President Trump, which also contributed to the decline.
Brent oil futures for September delivery fell to $69.91 per barrel, while West Texas Intermediate (WTI) crude futures dropped by 0.4 per cent to $68 per barrel.
The American Petroleum Institute (API) revealed a surprising increase in US crude oil inventories for the week ending July 4, up 7.1 million barrels versus a forecasted draw of 2.8 million barrels, following a previous increase of only 680,000 barrels.
Gasoline inventories fell by 2.2 million barrels, and distillate stocks decreased by 800,000 barrels. Data indicates potential oversupply issues in the US market due to demand and supply challenges.
But in a fresh report the Energy Information Administration (EIA), observed that, the U.S. sees domestic crude output growth slowing more than expected this year as choppy oil prices limit drilling activity.
The U.S. crude output is now expected to grow by 160,000 bpd this year to 13.37 million bpd and remain flat in 2026, according to the Energy Information Administration’s Short-Term Energy Outlook released Tuesday.
The production forecast for this year represents a drop of about 50,000 bpd from the Agency’s previous projections in June.
Drilling rigs in the U.S. have been declining steadily and are hovering near four-year lows even as oil prices stabilised after plunging to multi-year lows on worries about global demand.
The Agency also revised previous monthly data to show that producers have been drawing down inventories of pre-drilled wells in June. The number of drilled but uncompleted wells fell by seven to 5,291, the lowest among records dating back to the start of 2013.
The so-called DUC count can be an indication of future supplies, with the plunge in the count signaling that producers would be unlikely to unleash a wave of output quickly even if oil prices surge.
Still, some producers benefited from a brief surge in prices as a standoff between the U.S. and Iran injected a super-sized premium into the market, though it quickly evaporated after it became clear that Tehran had no plans to target energy infrastructure. The short-lived bump triggered a flood of hedging among shale drillers seeking to lock in higher prices. This may allow for some incremental drilling if prices resume their slide.
EIA expects significant global oil inventory builds will put consistent downward pressure on oil prices in the longer term, with Brent prices averaging $58 a barrel in 2026. The global benchmark is currently trading near $70 a barrel.
Meanwhile, Nigeria’s oil rig counts have risen to 46 from 31 as at January 2025. This increase according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) signals a vibrant Petroleum Industry.
Commission Chief Executive, Gbenga Komolafe, stated this during a 2-day media workshop in Abuja on Wednesday. According to him, the growth in rig counts showed that the country is making huge progress in harnessing its hydrocarbon resources.
This he said, is in line with the Commission’s effort to boost oil production, and achieve its ambitious plan to increase Nigeria’s crude oil production by one million barrels per day within October 2024 to October 2026.
According to him, the NUPRC through the Project One Million Barrels initiative which was launched in October 2024, has scaled up Nigeria’s oil production from one million barrels per day, oscillating around 1.7 million barrels.
Komolafe revealed that about 300,000 barrels of oil per day has been achieved since the launch of the programme.
