Crude Oil Price Drops To $59

Must Read

Spectranet and Nokia to provide 100+ Mbps ultra broadband services with FTTH to home and business users in Nigeria

Nokia GPON solution helps Spectranet better serve its customers by adding FTTH services to its current portfolio 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...

Midea Showrooms And Stores In Nigeria

If you’ve been wondering where Midea showroom and stores are in Nigeria below is a list of Showrooms and...
- 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:  VFD Group Plc Appoints Mobolaji Adewumi as an Executive Director, Finance

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:  BREAKFAST REPORT: THE WEEK AHEAD, STOCK WATCH & RECOMMENDATIONS FOR THE WEEK

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:  Over 100 Small Businesses to Participate in 2017 GTBank Food and Drink Fair

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

Stanbic IBTC Provides Succour For Limbless Children Through Together4ALimb Initiative

Stanbic IBTC Holdings PLC, a member of Standard Bank Group, has continued its quest to provide succour for children...

The One Factor Driving Today’s Oil Markets – Report

OilPrice Intelligence Report Oil continues to seesaw on every rumour (positive or negative) regarding the U.S.-China trade war. As a result, a lot of attention...

Chad Can Unlock More Investments By Diversifying Its Economy, UNCTAD Review Shows

Higher investment flows could be realized through agriculture and livestock sectors Geneva, 12 November 2019 – Economic diversification holds the key to unlocking more investment and...

Stanbic IBTC Wins 5 Awards At The 2019 FMDQ Gold Awards

Stanbic IBTC Holdings PLC, a member of the Standard Bank Group, has won five awards at the 2019 edition of the FMDQ Gold Awards...

Traveller Spend in Africa Could Increase by 27%, Sabre Research Reveals

Consumers would be more willing to travel if they were able to move freely within the continent, and if travel pain-points were addressed PORT LOUIS,...

More Articles Like This