Adedapo Adesanya
By Adedapo Adesanya
Ahead of the the Organisation of Petroleum Exporting Countries (OPEC) meetings scheduled for Thursday, December 5 and Friday, December 6, 2019 and its decision to extend production cuts could see oil prices performing better and also tackle an expected oversupply of oil in 2020.
The decision, which will involve all OPEC members and other non-producers led by Russia to take a decision to curb too supply that it has since 2017 because the United States, the biggest oil producers do not take output cuts.
However, Nigeria alongside Iraq which has been experiencing difficulties with compliance have been asked by Saudi Arabia to work on this so there could be a better outlook for oil prices.On the back of this, the Minister of State for Petroleum Resources, Mr Timipre Sylva, has said that Nigeria has met the 100 percent target agreement entered into by the OPEC and 10 non-OPEC member states.
The minister spoke in a teleconference on Sunday with the Chairman of the OPEC-Non-OPEC Joint Ministerial Monitoring Committee (JMMC) and Minister of Energy of the Kingdom of Saudi Arabia, Abdulaziz Bin Salman Bin Abdulaziz Al-Saud and some other DoC Ministers.
He recalled that at the last meeting of the JMMC held in September, in Abu Dhabi, he assured that Nigeria would within three months be fully compliant with the agreement that it had voluntarily entered into.
The Minister said that in fulfillment of that pledge, Nigeria’s compliance level had witnessed tremendous progress month by month since August resulting in 100 percent compliance in November.
He then commended member countries of the DoC that had consistently met and even exceeded their targets of production cuts.
He attributed the successes achieved in bringing stability to the oil market to the whole group but especially due to the extra efforts of these countries.
Mr Sylva commended the Kingdom of Saudi Arabia for the extra burden it had taken on its own volition to help stabilise the global oil market.
OPEC ministers will meet in Vienna on Thursday to review developments in the global oil market for the first half of 2020 which will involve the next step on the agreement which expires on March 31, 2020.
In its world outlook released last month, with rising production seen in non-OPEC countries such as Brazil and Norway threatening to add to expected oversupply, OPEC+ decision to further extend cuts by 400,000 barrels per day might be the best deal on the table.
Meanwhile, this has faced scrutiny from non-OPEC members like Russia which says its oil companies are finding it tough to reduce output during winter months due to very low temperatures.
The country contributes a total cut to 228,000 barrels per day to the total amount of cuts stipulated in the earlier agreement.
“Let’s wait …But I think the meeting, as usual, will be of a constructive nature.” said Russian Energy Minister, Alexander Novak on Tuesday.
