By Adedapo Adesanya
Nigeria is set to retain its 1.7 million barrels per day quota as the Organisation of the Petroleum Exporting Countries (OPEC) and its allies have hinted that the Africa’s largest oil producer may be allowed to maintain its existing oil output cuts until June 2020.
This came as a result of OPEC ally and non-OPEC oil producer, Russia backed Saudi Arabia’s push for stable oil prices following the listing of Saudi Aramco as the alliance is expected to meet on December 5 at its headquarters in Vienna.
This followed talks with a group of other oil producers, led by Russia, known as OPEC+ as the current oil supply cuts run through to March 2020.
It is expected that on December 5, 2019, Saudi Arabia will announce the final pricing of the initial public offering (IPO) of Aramco, in what it hopes will be the world’s largest IPO.
An OPEC source informed Reuters that the oil price at the time is likely to be key to Aramco’s listing, which is expected to happen around mid-December
“So far, we have two main scenarios, either meet in December and extend the current cuts until June; or defer the decision until early next year, meet before March to see how the market looks and extend the cuts until the middle of the year.
“It is more likely that we will extend the agreement in December to send a positive message to the market. The Saudis don’t want oil prices to fall, they want to put a floor under the prices because of the (Aramco) IPO,” Reuters quoted the source as saying.
OPEC sources said market conditions in the first quarter of 2020 remained unclear amid concerns of a slowdown in oil demand and weak output compliance by some producers such as Iraq and Nigeria is contributing to the outlook.
Modupe Gbadeyanka