The price of Bonny Light, Nigeria’s premium crude oil grade, weekend, dropped to $69.77 per barrel from $72 recorded the previous day, over fears of increasing United States stock and the spread of Delta variant.

The price of Bonny Light and other crudes, had risen to over $75 per barrel in July 2021, due mainly to improved vaccination during the period.

But the current slide would not affect the execution of Nigeria’s 2021 budget, which was benchmarked on $57 per barrel and 1.8 million barrels per day, (excluding Condensate), as the nation also produces between 300,000 – 400,000 of Condensate daily.

The drop in price was mainly driven by the resurgence of the Coronavirus pandemic in some oil consuming nations, including China and India, expected to impact negatively on demand, and by extension price.

It was also influenced by the report of the U.S. Energy Information Administration (EIA), which has it that crude stockpiles rose by an unexpected 3.6 million barrels last week, while gasoline inventories fell by a bigger-than-forecast 5.3 million barrels.

Nevertheless, in its July Oil Market Report, the Organisation of Petroleum Exporting Countries, OPEC, had stated: “The global economic growth forecast for 2021 remains unchanged at 5.5 per cent.

“In an initial assessment, global economic growth for 2022 is forecast at 4.1 per cent. However, future global growth continues to be impacted by uncertainties, including the spread of COVID-19 variants and the pace of the global vaccine rollout.

“In addition, sovereign debt levels in many regions, together with inflationary pressures and central bank responses, remain key factors that require close monitoring.

“Nevertheless, upside potential could materialize as ongoing containment COVID-19 measures in combination with additional fiscal and monetary stimulus could turn out to be more effective than envisaged, leading to further gains in consumption and investments.”