Avengers’ ceasefire, increased Iraq supply trigger fall in crude oil prices

Oil prices are currently experiencing their biggest daily fall in over a month, after Iraq’s announcement of increased supply and Niger Delta Avengers (NDA) ceasefire signals.

On Saturday, NDA announced its readiness to negotiate a ceasefire with the federal government through Edwin Clark, a controversial statesman.

“We are going to support any collective/negotiation team emerging from the Chief (Dr.) Papa Edwin Kiagbodo Clark Niger Delta elders and genuine stakeholders conference to engage with the federal government of Nigeria,” Avengers had said in a statement.

Iraq, on the other hand, lifted a three-month embargo placed on exports from three oil wells, including Baba Gurgur, Khabaza and Jambouri in Kirkuk, northern Iraq.

The embargo placed on the three oil wells by Iraq’s Northern Oil Company (NOC) on March 11, 2016 was lifted on Saturday, to raise the country’s oil output by 150,000 barrels per day.

With a ceasefire in Nigeria, Nigeria’s oil output may rally from 1.5 million barrels per day to 2.2 million barrels per day.

Iraq’s and Nigeria’s renewed input would result to about 850,000 barrels in addition supply to the global market.

This oversupply concerns sunk oil prices by nearly three percent on Monday, as Brent crude lost over $1.4 on every barrel, trading at $49.4 per barrel.

West Texas Intermediate (WTI) was also trading at around $47, from over $48 on Friday.

Ibe Kachikwu, minister of state for petroleum resources, had earlier said Nigeria would need to produce as much as 3.1 million barrels per day in 2016, to meet its budgetary needs.