By Adeola Yusuf Senior Correspondent, Lagos (With Agency Reports)
Nigeria steadied oil production at 2.4 million barrels per day (bpd) at the weekend and crude prices on the international market rose.
Economists predicted that the world would keep consuming more oil even with the disasters in Japan and the intifadas in North Africa and the Middle East.
Major oil producers like Saudi Arabia have cranked up production to make up for lost Libyan oil. While this increases the flow of oil right now, it also cuts off spare production that could have been tapped later this year to meet increasing world demand.
Spare production capacity, which was thought to be around five million bpd earlier this year, has since dropped to about three million barrels.
Traders are carefully assessing economic strength in the United States, which consumes about 22 per cent of the world’s daily output.
High oil prices could hurt growth. American Government reports gave a mixed reading last week.
The U.S. said home construction has nearly come to a halt and that companies trimmed orders for long-lasting manufactured goods. But it also added that oil demand keeps rising despite a 49-cent increase in pump price since the year began.
Benchmark West Texas Intermediate crude for May delivery settled at $105.40 per barrel (pb) on the New York Mercantile Exchange on Friday.