Bonny Light Crude Rises to $70 as U.S. Stockpile Drop Tightens Supply

Nigeria’s premium crude grade, Bonny Light, climbed to $70 per barrel on Tuesday, up from $68 the previous day, following a decline in United States oil inventories that has tightened global supply.

The price movement comes after the U.S. Energy Information Administration (EIA) reported a drop in both crude and distillate inventories, raising concerns of supply shortfalls in the coming months.

According to the agency’s September Short-Term Energy Outlook, American distillate stockpiles are projected to end 2025 and 2026 below historical averages, a trend that could sustain upward pressure on prices.

Oil traders say the market reacted swiftly to the data, with Brent and West Texas Intermediate benchmarks also recording gains.

For Nigeria, the rise in Bonny Light offers some relief but still falls short of the $75 per barrel benchmark adopted for the country’s 2025 national budget.

Analysts warn that the gap between actual market prices and budget assumptions could create fiscal pressure if sustained, especially given Nigeria’s heavy reliance on oil revenues to fund government expenditure.

However, they note that any sustained rally above $70 would still improve the country’s earnings compared to earlier months when prices hovered in the mid-$60s.

The development also underscores Nigeria’s challenge of balancing potential gains from higher global oil prices with domestic production shortfalls, pipeline disruptions, and investment uncertainties in the sector.

Market watchers believe continued inventory drawdowns in the U.S. and other consuming nations, coupled with geopolitical tensions, could further support prices in the short term. But they caution that demand-side risks, including slower global economic growth, remain a threat to oil’s upward momentum.