Crude Oil Price Drops To $59

Must Read

Lagos State Government bans Okadas, Tricyles, including Opay, Gokada

…Restricts Their Operations On 50 Highways, Bridges Lagos State Government on Monday wielded the big stick against the menace of...

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...

List of Access Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...
- Advertisement -
- Advertisement -

Crude Oil prices fell Thursday after a conference of the Organisation of Petroleum Exporting Countries (OPEC) and its allies took no decision on strenghteen supply cuts but focused instead on bringing Nigerian and Iraqi output down to their agreed quotas.

OPEC agreed Thursday to trim oil output by asking over-producing members – Iraq and Nigeria to bring production in line with their targets as the group strives to prevent a glut amid soaring United States production and a slowing global economy.

Crude oil prices also came under further pressure after the European Central Bank cut its deposit rate to a record low -0.5 per cent from -0.4 per cent, saying it will restart bond purchases of 20 billion euros a month from November to prop up eurozone growth.

The price of the global benchmark crude, Brent was down $1.20 at $59.61 per barrel, while the US West Texas Intermediate futures fell 96 cents to $54.79.

Both were heading for the third session of losses, from their 2019 peaks of $75 as fears of a global recession outweigh concerns about falling supply from sanctions-hit Iran and Venezuela.

Saudi Arabia’s new Energy Minister, Prince Abdulaziz bin Salman, said deeper cuts would not be decided before a meeting of the OPEC planned for December.

Abdulaziz said, however, his country would keep cutting by more than it pledged in a deal that has throttled supply by OPEC and its allies by 1.2 million barrels per day.

Read:  President Muhammadu Buhari Pens 2019 Appropriation Bill

Nigeria, Iraq and Russia have, at times, produced above their quota.

A statement from OPEC and its allies, a grouping is known as OPEC+, said oil stocks in industrial countries remained above the five-year average.

Oil market-monitoring committee formed by OPEC+, met yesterday in Abu Dhabi ahead of their policy discussions in Vienna in December.

Though OPEC+ has over-complied on average with its agreed cut of 1.2 million barrels per day (BPD), some members, such as Iraq and Nigeria, were said to have been producing above their quota.

Read:  United Nations And Bertrand Piccard Join Forces To Promote Renewable Energy In Africa

Iraq, OPEC’s second-largest oil producer, pledged yesterday to reduce output by 175,000 BPD by October, while Nigeria is to reduce supply by 57,000 BPD.

Iraq has been raising its production and exports steeply in recent years, while Iran’s exports have collapsed over the past year because of US sanctions.

Iraq has been pumping 4.8 million BPD in recent months instead of its target of 4.512 million. Nigeria produced 1.84 million BPD in August versus its target of 1.685 million.

OPEC’s de facto leader, Saudi Arabia, will voluntarily overdeliver on its targets and pump just below 10 million BPD, Abdulaziz also said.

He said yesterday’s meeting also discussed rising US shale output and exports, a global economic slowdown and a possible softening of US sanctions on OPEC member Iran.

Read:  United Nations And Bertrand Piccard Join Forces To Promote Renewable Energy In Africa

The Saudi minister added that any formal decision on deeper oil cuts could be taken only at the next OPEC+ meeting in December.

“I can tell you quite frankly that in all deliberations we have discussed all the potential uncertainties as any responsible organisation and we are mindful of them,” Abdulaziz stated.

“There is clear readiness to continue to be responsible and responsive.”

He added that the ministerial committee would gather again before the full OPEC meeting in December.

OPEC, Russia and other non-members agreed in December to reduce production by 1.2 million BPD – or 1.2 per cent of global supply – from January 1 this year.

OPEC’s share of the cut, which now runs to March 2020, is 800,000 BPD, delivered by 11 members and exempting Iran, Libya and Venezuela.

Oil prices had tumbled more than two per cent on Wednesday after a report that US President Donald Trump was considering easing sanctions on Iran, which could boost global crude supply at a time of lingering worries about energy demand.

Also feeding the bearish sentiment, the International Energy Agency, which advises industrial economies on energy policy, said surging US output would make balancing the market “daunting” in 2020.

- Advertisement -

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

Latest News

Airtel Africa Revenue rose 9.9% and Subscriber Base touched 107 million

Telecommunications giant, Airtel Africa Plc, has announced its revenue increased 9.9 per cent to $2.522 billion during the nine-month...

MPC’s Surprise Hawkish Decision: How will Banks react?

Last week, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its first meeting in 2020. Contrary to the consensus...

Important Practice Tests and Tips That IT Professionals Should Know about to Pass Microsoft MS-200 Exam

Introduction By way of preface, administrators managing the Microsoft 365 messaging platform are proficient experts who have gone through intense training. Indeed, getting all tasks...

Lagos Bio-Safety level 3 Laboratory Commences Operations

The Lagos State Level-3 Bio-Safety Laboratory, also known as the Lagos Bio-bank, built with support from the Canadian government to ensure effective management of...

Market’s Fears Spread Along With Wuhan Virus

The sense of serious concern about the economic effects of the Wuhan virus – evident on Wall Street Friday – has turned into something...

More Articles Like This