Brent Tops $71 on Drop in US Inventories Crude Oil.

Crude oil prices thursday hit their highest since December 2014 after the United States crude oil inventories posted a 10th straight week of declines and as the dollar continues to weaken.

International benchmark Brent futures settled at $71.12, above the three-year high of $70.37 reached on January 15, 2018.

US West Texas Intermediate (WTI) crude oil futures climbed to 66.22 dollars per barrel in early trading, also the highest level since early December 2014.

WTI first reached its highest since December 2014 on January 16 at $64.89.

Healthy world economic growth prospects and expectations for continued production curbs by the Organisation of Petroleum Exporting Countries (OPEC), Russia and their allies have continued to boost oil prices.

The International Monetary Fund (IMF) last Monday revised upward its forecast for world economic growth, which could help demand the for petroleum products.

This is coming as OPEC, Russia and other producers continue their supply-cut agreement which began in January 2017 and is due to run until the end of 2018.

OPEC’s main objective for the cuts is to eliminate a global surplus in oil stocks and rebalance the market.

There is some expectation that OPEC will let the agreement expire at the end of 2018, but major producers have not yet suggested that this is in the offing.

The sharp plunge in Venezuelan production is offsetting increases from the United States, which is on the cusp of breaking its all-time production record of 10.04 million barrels per day.

Venezuela’s output fell to a meagre two million bpd in 2017, far short of expectations for 2.5 million bpd, and the International Energy Agency said it could keep declining in 2018.

In foreign exchange markets, the US dollar hit its lowest level since December 2014 against a basket of other leading currencies.

A weakening dollar often results in financial traders taking investment out of currency markets and into commodity futures like crude oil.

Oil traders had said the prices were unlikely to fall far due to risks to supply disruptions.

In Nigeria, the militant group Niger Delta Avengers (NDA) had threatened to launch attacks on the country’s oil sector in the next few days.

The militant group had warned the Nigerian Government to brace up for another round of attacks that it would soon unleash on oil and gas facilities in the country.

The group had also stated that with the recent killings across the country, the time was ripe for the restructuring of the country.

Reuters quoted analysts as saying that rising oil prices would likely start to have an inflationary effect.

Looming over the generally bullish oil market has been US oil production, which is edging ever more closely towards 10 million barrels per day (bpd), hitting 9.88 million bpd last week.

US output has grown by more than 17 per cent since mid-2016, and is now on par with that of top exporter Saudi Arabia.

Only Russia produces more, averaging 10.98 million bpd in 2017.

Meanwhille, the Nigerian Petroleum Development Company (NPDC), one of the upstream subsidiaries of the Nigerian National Petroleum Corporation (NNPC), has said it will increase its daily crude oil production to 500,000 barrels per day (bd) before 2022, from the 200,000bd it currently produces.

The Group Managing Director of the NNPC, Dr. Maikanti Baru, disclosed this new crude oil production target of the NPDC when he inaugurated its board of directors in Abuja.

According to a statement from the Group General Manager, Public Affairs of the NNPC, Mr. Ndu Ughamadu, yesterday Baru, who is the chairman of the board, however charged its officers to grow the company’s assets and ensure that the 500,000bd oil production target is met by 2022.

He disclosed that the company was currently supplying 50 per cent of the gas needed by the West African Gas Pipeline, adding that it was necessary for it to have more gas assets.

He said the NPDC’s Memorandum of Understanding (MOUs) with host communities should be tied to the availability of the gas lines, saying: “As stakeholders, they share in both our success and losses as well.”

The statement also quoted the Managing Director of NPDC, Mr. Yusuf Matashi, to have said at the inauguration that from the growth the company had witnessed since 2016, the 500,000bd target would be realised by 2022.

Matashi said the board came at an appropriate time, adding that it would address issues of processes and procedures necessary to drive a major oil company like the NPDC, while assuring it of the commitment of the company to the growth target.

The statement said the NPDC currently produces about 200,000bd of oil and would according to its work programme, increase it to 300,000bd in 2018.