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Nigeria signs up for OPEC nine-month crude oil supply cuts to boost prices
NIGERIA, alongside other member-states of Organisation of Petroleum Exporting Countries, OPEC, on Tuesday, agreed to extend oil production cuts until March 2020 to boost the prices of crude oil in the global market.
This was announced at the ongoing 176th meeting of the OPEC’s conference held in Vienna where the coalition of 24 member countries belonging to OPEC and OPEC+ blocs agreed to cut down 1.2 million barrels per day of output for the next nine months.
OPEC and a Russia led oil producing nations formed an alliance tagged as OPEC+ which had agreed to cut down inventories and remove 1.2 million barrels per day of crude oil from global markets on January 1, in a bid to raise oil prices.
Nigeria had been exempted of the OPEC/non-OPEC production cuts, for not adhering to its output ceiling, due to disruptions in the Niger Delta.
The Head of the Nigerian Delegation to the 176th Meeting of OPEC in Vienna, Austria, Folashade Yemi-Esan, defended the country’s position in improving its compliance with the deal according to a report.
“A higher quota is not the essence, If we wanted higher quotas, we would not have exited the exemption. We are working very hard to keep that ceiling, but if for any reasons the ceiling is increased, we will keep to whatever ceilings we get,” she said.
Saudi Energy Minister Khalid al-Falih claimed that extension of supply cuts for nine months instead of six months would allow the deal to cover the seasonally weak first quarter of 2020 and prevent a potential inventory build of 100 million barrels.
“The global economy in the second half of the year looks a lot better today than it did a week ago because of the agreement reached between President Trump and President Xi of China and the truce they have reached in their trade and the resumption of serious trade negotiations,” he said.
Anxiety over weaker global demand for crude oil as a result of a U.S – China trade war has added to the challenges faced by the OPEC/OPEC+ alliance according to a Reuters report.
Crude oil prices rose to $65 per barrel after OPEC approved the supply cut extension on Tuesday, the ongoing meeting will also discuss a charter for long-term cooperation between OPEC and non-OPEC producers.