Nigeria and other leading oil countries have gathered in Madrid, Spain to search for a solution to the unprecedented crude price; which neared $144 per barrel (bp)on Monday, and continues to threaten the world economy.
The new price surge came three days after the Organisation of Petroleum Exporting Countries (OPEC)predicted a tougher time for world oil transaction.
OPEC President, Chakib Khelil, has posited that the weakening United States Dollar is a major factor in the sky rocketing prices.
He said the prices are likely to hit $170 before the end of this quarter as the value of the Dollar continues to fall.
Prices have forged higher in recent weeks, because of the violence in the Niger Delta, Nigeria’s oil basin, and tension in the Middle East.
Brent North Sea crude reached a historic peak of $143.91 pb and New York light sweet crude struck an all-time high of $143.67 on Monday.
“The market remains well supported by the broad weakness in the Dollar, ever increasing investor interest in commodities, persistent supply disruptions and geopolitical tensions,” said Sucden analyst Andrey Kryuchenkov.
Crude futures have doubled in the past year and have risen by almost 50 per cent since the start of 2008, when they breached $100 for the first time, triggering fears over inflation and slower economic growth.
On Monday, high fuel prices sparked protests among hundreds of truckers across France, blocking main highways and snarling commuter traffic around Paris.
Consumer countries blame record prices on tight supplies amid strong demand, and unrest in producer countries such as Iran, Iraq and Nigeria. In particular, they accuse the OPEC of not producing enough crude.
The OPEC insists that the weak Dollar is at fault.
It fell further against the Euro on Monday, fuelling demand for oil, which is priced in the U.S. unit, from traders holding stronger currencies, traders said.
After striking a fresh pinnacle, Brent North Sea oil for August delivery stood at $143.11 pb, a rise of $2.80 from Friday’s close.
New York’s main oil contract, light sweet crude for August delivery, was at $142.65, a rise of $2.44.
However, Nigeria is gradually recovering from the negative impact of oil production cuts, with its current output at three million barrels per day (bpd).
Minister of State for Energy (Petroleum), Odein Ajumogobia, denied at the 19th World Petroleum Congress (WPC)in Madrid that Angola has overtaken Nigeria as Africa’s leading oil producer.
Ajumogobia, who leads his country’s delegation, also insisted that Nigeria’s oil production has not been completely grounded as peddled.
His words: “Our production levels (with Angola’s)currently are about the same. The problem is the militancy, and the time the assertion that Nigeria had lost her position as Africa’s leading oil producer to Angola was when there was a shut-in of about 250,000 bpd.
“But some of that production has resumed. Nigeria’s capacity is actually over three million bpd; half of that capacity is the direct consequence of the militancy in the Niger Delta.”