By Adedapo Adesanya
The Organisation of Petroleum Exporting Countries (OPEC) is looking at deeper cuts in oil supplies for its allies in December as the cartel’s forecasts pointed to slower global growth and lower demand next year.
This was revealed by the producer group’s secretary general, Mohammad Barkindo in London on Thursday.
“The conference will take appropriate, strong, positive decisions that will set us on the path of heightened and sustained stability for 2020,” Barkindo said.
An Alliance of OPEC, Russia, and other producers known as OPEC+ have since January implemented a deal that will cut oil output by 1.2 million barrels per day to support the market.
The deal will run till March 2020 and the OPEC+ will meet on December 5 – 6, 2019 to set policy and regarding the prospect of deeper oil supply cut, the secretary general hinted that all options were open.
Nigeria, a member of the OPEC+, was granted an increase in its oil output under the petroleum production quota deal member states renewed in December 2018, according to a report by Reuters, this will see Nigeria produce 1.774 million barrels per day, as against the 1.685 million barrels per day it was allowed previously.
Oil prices have failed to gain a lasting boost from supply disruptions this year, including the attack last month on Saudi Arabian oil installations that briefly shut down more than half of production in the world’s top exporter and drove the prices of oil to peak above 20 percent.
The consideration for Nigeria was down to the coming on stream of the Total-owned Egina offshore oil field, which began production in January 2019 which officials said was not factored into the quota structure.
Nigeria which had its budget presentation on Tuesday, October 8, 2019, factored in a production quota of 2.18 million barrels per day at $57 per barrel to fund its 2020 budget.
However, it was then disclosed that Nigeria adds condensates – an ultra-light variant that is not counted by OPEC, into its production output figures.
Data from the Department of Petroleum Resources (DPR) indicated that condensate production in 2017 – the most recent figures available, ranged between 414,000 and 497,000 barrels per day
The difference between 2020’s oil production assumption and the OPEC quota is 410,000 barrels per day, which means the country might be able to obey OPEC’s production quota and meet its budget assumptions.
Modupe Gbadeyanka