The world’s largest independent oil trader, Vitol Group, has said that it expects crude oil price to climb above $80 per barrel in the next couple of weeks.

This follows the expectation that the global crude oil demand will rise by an extra half a million barrels per day by winter due to global gas crisis which has led to rise in gas prices and driving a rush for other alternative sources of fuel.

This was made known by the Chief Executive Officer of Vitol, Russel Hardy, during an interview in London on Thursday, where he said that oil is most likely headed above $80 a barrel, partly as higher gas prices boost demand.

What the Vitol Chief Executive Officer is saying

Hardy said that this could force OPEC+ producers to add more supply into the market.

He said, “Can demand surprise us to the upside because of power switching? Yes,” Hardy said. “Is it likely that there’s half a million barrels a day of extra demand that comes through because of gas pricing? Probably our view is, that is likely across winter.

“All people are worried about is that we’re missing pieces of stock which we normally have,” he said. “During the winter, demand for gas is massively higher than demand for gas during the summer. You have to store, there’s no two ways around it.”

Hardy’s bullish sentiments echoes that of the Group Managing Director of NNPC, Mele Kyari, who predicted higher oil prices in the next 3 months and Goldman Sachs Group Inc., which is predicting higher crude oil prices, especially if the winter months are colder than normal.

In case you missed it

Recall that yesterday, the NNPC said that the supply crisis which has negatively affected the global natural gas market and has led to rising prices, could push up oil prices by as much as $10 a barrel, which is about $86 per barrel over the next 3 to 6 months.

The NNPC boss pointed out that the global gas crisis which has led to an increase in gas prices will make energy consumers seek fuel alternatives to natural gas in the nearest future which might see demand for oil rising by as much as 1 million barrels per day with attendant effect on crude oil prices

Traders have been assessing the likely impact of a tightening natural gas market on the broader energy complex over the coming winter.

China, the second-largest oil consumer globally, posted a slightly poor economic report which clouded the fuel demand outlook in the near term.

An earlier report by Caixin showed China’s manufacturing purchasing managers’ index (PMI) was 50.3 in July, lower than expected. On Saturday, manufacturing and nonmanufacturing PMIs came in at 50.4 and 53.3 respectively.

Business activity in the country has slowed due to higher raw material costs, equipment maintenance, recent floods, and the latest outbreak of COVID-19.

Asia’s biggest economy had been recovering at a rapid pace but if this recent slowdown deepens, the outlook will fall significantly. The outlook for crude demand is shaky, and that is unlikely to change until global vaccination rates improve.

Investors also looked forward to more oil production from the Organization of the Petroleum Exporting Countries and its allies (OPEC+).

Brent crude oil futures fell 1.05% at the time of writing this report and WTI crude oil futures fell 0.92%. According to reports, OPEC’s oil production rose to its highest level since April 2020 in July. Efforts to reduce production curbs will be further eased from August 1. Since then, Saudi Arabia has progressively ceased its voluntary supply cut.

There continues to be an increase in COVID-19 cases on a daily basis. A higher vaccination rate could however prevent the need for restrictive measures that caused fuel demand to plummet in 2020.

There will be no lockdown as the Delta variant of the virus fuels an outbreak of cases in mainly unvaccinated populations, but the situation is escalating, U.S. officials report.

The daily gasoline consumption of India, the third-biggest oil importer globally, exceeded pre-COVID-19 levels in July. While COVID-19 lockdowns were relaxed across the country, gas oil sales were low, indicating a sluggish industrial outlook.

Segilola Gold Mine, Nigeria’s first and largest industrial-scale gold mine owned by the Canadian mineral exploration company, Thor Explorations Limited poured its first gold from the mine in Osun state on Friday.

This was disclosed in a statement by Thor Explorations, reported by Bloomberg.

This represents a major step towards diversifying and maximizing Nigeria’s gold mineral reserves. The Canadian company has spent $100 million to build the mine, while Africa Finance Corp, its largest shareholder, provided $86 million in debt and equity financing.

The company added that the plant, which will now ramp up over the next six weeks, is targeting an output of 85,000 ounces a year, which is still below African gold mining outputs from the two biggest gold projects in Africa – Barrick Gold Corp’s Kibali in the Democratic Republic of Congo and Loulo-Gounkoto in Mali – which produced 808,000 ounces and 680,000 ounces respectively in 2020, according to Bloomberg.

Minister of Mines Olamilekan Adegbite also disclosed on Friday that Segilola Mine “proves to the mining world that Nigeria is the next big frontier mining destination,” adding that it is a testament to the Buhari’s administration drive to diversify the economy through the mining sector.

What you should know

Recall it was reported earlier this year that Segilola Gold Mine, Nigeria’s first and largest industrial-scale gold mine owned by the Canadian mineral exploration company, Thor Explorations Limited, is set to be completed in the first half of 2021.

The gold mine tagged “Segilola” is a high-grade gold project being developed in Osun state, Nigeria. It is expected to hasten Nigeria’s economic diversification and reduce unemployment among the youth populace.

Thor Explorations Limited announced that a set of encouraging drill results from its in-pit and extensional diamond core drilling program revealed that the gold mine is on course to pour its first gold in Q2 2021.