Adedapo Adesanya
By Adedapo Adesanya
The Organization of the Petroleum Exporting Countries (OPEC) daily basket price stood at $44.24 per barrel on Wednesday, compared with $44.29 per barrel the previous day, according to the latest OPEC Secretariat calculations.
The average of 13 crudes prices dropped 5 cents or 0.11 per cent day-on-day as prices generally fell at the market due to rise in crude inventories just as fresh tensions rose between the United States and China is beginning to make traders fret.
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).
In other OPEC related news, Angola is resisting pressure by OPEC for a steeper oil output cut to comply fully with record supply curbs.
An alliance of oil producers have been cutting oil output since May by a record 9.7 million barrels per day after the coronavirus crisis destroyed a third of global demand. But from next months, the cuts are due to taper to 7.7 million barrels daily until December.
Saudi Arabia, which chairs a panel that monitors adherence with the oil cuts, has been heading efforts to press laggards such as Iraq, Kazakhstan, Nigeria and Angola to improve compliance with the reductions and compensate for May overproduction in July to September.
However, Angola is saying it will not compensate for its overproduction in July – September like the rest of the countries but would be able to compensate only in October-December.
Reports cited sources that fellow OPEC members, Nigeria and Algeria have reached out to Angola to convince it to execute the agreement or risk facing an embargo.
In May, Angola pumped 1.28 million barrels per day, according to OPEC data, or 100,000 barrels daily more than its target.
It then trimmed production to 1.24 million barrels per day in June. However, this was 60,000 barrels per day above its target.
There is no clear cut what decision that will be taken yet but sources say the Angolan national oil company, Sonangol will supply full volumes in August to buyers such as India’s refiner MRPL and Indian Oil Corporation (IOC) as well as to Unipec, the trading arm of Chinese refiner Sinopec, and China’s state-owned Sinochem.
