Oil prices are close to hitting $50 per barrel for the first time since November — but it has nothing to do with Saudi Arabia and Iran cutting oil production, as so much of the market has hoped.
It’s all down to Nigerian militants.
Nigeria was dethroned as Africa’s largest oil producer this month because the deteriorating political and security situations pose such a threat to Nigeria’s oil output.
Militant activity from group Niger Delta Avengers is forcing supply disruptions and has made the country’s output fall by 800,000 barrels per day to 1.4 million barrels per day, according to Nigeria’s oil minister Emmanuel Ibe Kachikwu.
Data cited by RBC Capital Markets’ commodities team in an early May research note said Nigeria’s oil production slipped to 1.69 million barrels per day.
Regardless of either assessment, this is still below the production level of Angola, which held steady in April, at 1.8 million barrels per day.
You can see the effect of the Nigerian militant activity on the oil market on Tuesday, reducing supply and boosting the price: