Nigeria’s oil minister said on Sunday global oil prices were expected to ease slightly in the coming months and that OPEC members did not consider their current level damaging to the world economy.
Oil prices surged above $110 a barrel last month after political unrest in Libya more than halved the North African producer’s oil output. Top oil exporter Saudi Arabia has promised to meet any supply gap but prices have remained close to the two-and-a-half-year high hit last month.
On Friday, Brent crude closed at $113.93 a barrel, while U.S. crude closed at $101.42.
“It is expected there will be a slight, gradual reduction in global crude prices over the next few months. It very much depends on the global situation,” Oil Minister Deziani Allison-Madueke told Reuters.
The Organization of the Petroleum Exporting Countries (OPEC) said earlier this month that its February oil output rose to the highest level since December 2008 when the group agreed a record cut in output to support plunging oil prices.
Members of the producer group have fresh memories of how quickly oil prices fell from record highs of $147 a barrel in July 2008 to below $33 six months later and will be wary of taking any new action, despite analysts concerns that the current oil price is damaging to global economic recovery.
“None of the OPEC countries have considered it (the current oil price) damaging. Over the next six months, we will all be watching the price and supply situation very closely,” Allison-Madueke said in the capital Abuja.
GAS PLANS
Nigeria has boosted its own oil output since an amnesty with militants in 2009 brought a halt to sabotage attacks on oil facilities, which at their height in 2006 cut out more than a quarter of the country’s production.
Allison-Madueke said Nigeria wanted to build on some successes in the oil sector by better exploiting its gas reserves, the seventh largest in the world, and said a new development plan would be launched next week by President Goodluck Jonathan.
Jonathan, who is running in nationwide elections in under three weeks, will set out plans to boost gas output and improve Nigeria’s woeful power situation by exploring new resource basins and improving pipeline infrastructure, she said.
Africa’s most populous nation of more than 140 million people is blighted by persistent electricity outages, depriving many of light at night or the ability to power water pumps, let alone recharge mobile phones or access the Internet.
South Africa, which has a third of Nigeria’s population, has 10 times the power generation capacity.
The “gas revolution” due to be announced on Thursday will be the latest in a string of plans the government has promised will help Nigeria to better capitalise on its natural resources.
A wide-ranging energy reform bill, years in the making, is currently before parliament while power sector reforms and a gas masterplan are already supposed to be making an impact.
“The agenda will necessitate an unprecedented growth in our gas supply, from the current one billion cubic feet per day to over 10 billion cubic feet per day by 2020,” Allison-Madueke said.