The Group Managing Director, GMD, of the Nigerian National Petroleum Corporation, NNPC, Mele Kyari, has projected that the supply crisis affecting the natural gas market may push oil prices up by $10 a barrel.
Kyari who said this on Wednesday in an interview with Bloomberg Television, stated that the crude oil price may rise by $10 per barrel within the next three to six months, explaining that an increase in crude oil price on the fact that the gas supply crisis will make energy consumers to shift from gas to other fuels.
He added, “You wouldn’t be very wrong if you said you’d see an additional $10 on a barrel.”
Brent crude traded above $75 on Wednesday, having increased about 45 per cent this year. Demand may climb by one million barrels a day, Kyari said, or slightly more than one per cent of global consumption.
Gas prices have surged this month in Europe and Asia to the equivalent of around $155 per barrel of oil, partly because shortages of coal and wind power have forced governments to ramp up gas purchases to run their electricity plants.
Gas prices will probably remain at record levels of around $25 per million British thermal units for months and perhaps go even higher, Kyari said in Dubai, where he’s attending Gastech, a major conference for the gas and hydrogen industries.
He said currently, Nigeria is facing problems with maintaining exports of liquefied natural gas, adding that there will be “slippages” with Nigerian LNG cargoes in 2022 and possibly this year too because of shortages at local gas fields.
“We have to do something quick,” he said, adding that supply issues will be resolved by mid-2022.” Kyari said.
Nigeria was the world’s sixth-biggest LNG exporter last year, shipping almost 22 million metric tons, according to data compiled by Bloomberg.
Much of the problem with global supplies is down to fossil fuel projects having stalled, he said, as activists and investors urge companies to accelerate a switch to cleaner energy.
His comments echoed the sentiments of OPEC’s top official and the energy ministers of Qatar and the United Arab Emirates, all of who said on Tuesday that the crisis showed the need for more investments in oil and gas.