In a surprising show of resilience, Nigeria’s premium crude oil blend, Bonny Light, maintained a price of $68 per barrel on Friday, even as major global benchmarks fell in response to a newly signed ceasefire agreement between Israel and Hamas.
The deal, brokered by former U.S. President Donald Trump and ratified by Israel’s government, aims to end the war in Gaza. This development typically signals reduced risk of supply disruptions in the Middle East, leading to lower oil prices. As a result, Brent crude futures fell 0.5% to $64.89 per barrel, while West Texas Intermediate (WTI) crude dipped to $61.
Analysts suggest that the market’s focus is shifting from geopolitical tensions to fundamental supply concerns. The ceasefire has redirected attention to a potential global oil surplus, especially as the OPEC+ alliance moves forward with unwinding production cuts.
Despite this bearish outlook, Bonny Light’s stability contrasts with the broader market. Technical analysis indicates that the Nigerian crude has faced recurrent selling pressure, with a key resistance level around $65-$68. A decisive break below the $65 support level could trigger further declines toward $62.
The steady performance of Bonny Light comes amid a brighter fundamental outlook for Nigeria’s oil industry. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reported a dramatic increase in active oil rigs, from 8 to 69 over the past four years, attracting nearly $40 billion in investments.
Current oil production stands at 1.65 million barrels per day (bpd), with projections to reach 2.5 million bpd by 2027. These gains are largely attributed to government reforms under President Bola Tinubu, which have enhanced security and led to a reported 90% reduction in crude theft. Recent military operations in the Niger Delta have seen the destruction of illegal refineries and the seizure of thousands of litres of stolen crude.
However, the sector still faces challenges, with production having dipped slightly in August after several months of growth.
