OPEC Basket Drops 0.96% to $43.15 Per Barrel

By Adedapo Adesanya

The price of crudes belonging to 13 member states of the Organisation of the Petroleum Exporting Countries (OPEC) dropped 0.96 percent to $43.15 per barrel on Tuesday, July 7 compared with $43.57 it traded the previous day, according to OPEC Secretariat calculations.

The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

The drop in the crude aggregate can be attributed to recent pressures brought by surging COVID-19 cases in major economies and its adverse effect on fuel demand recovery.

In other OPEC related news, Angola has agreed with producer cartel and its allies, OPEC+  to comply fully with a global pact on supply curbs and will compensate for previous overproduction by cutting more from July to September.

According to reports, Angola has now committed to improving its compliance with its quota and to make up for its May and June overproduction by cutting more in July to September.

“Angola has agreed to comply as per (its agreement) with the JMMC,” referring to the OPEC+ panel, the Joint Ministerial Monitoring Committee (JMMC), which advises OPEC+ and holds its next meeting on July 15.

The JMMC, which is chaired by Saudi Arabia and monitors adherence with the oil curbs, has been pressing Angola and other laggards in the pact, such as Iraq, Kazakhstan, Nigeria and Gabon, to commit to improved compliance.

In May, Angola pumped 1.28 million barrels per day, according to OPEC data, which showed 100,000 barrels per day more than its target. Estimates, however, showed that it trimmed production to 1.24 million barrels per day in June, 60,000 barrels per day above its target.

OPEC+ agreed to cut oil output from May by a record 9.7 million barrels per day after the coronavirus crisis destroyed a third of global demand. The record cuts are now due to run to the end of July, before tapering to 7.7 million barrels per day until December.