News Worms
News Worms

Nigeria has no timeframe to join OPEC production cuts - oil minister

Nigeria has no timeframe to join OPEC production cuts - oil minister

Without further cuts by OPEC and other producers or a significant fall in oil inventories or a decline in us drilling, Goldman said crude prices could fall below $40 per barrel.

Giving its first forecasts for 2018 in a monthly report, the Organization of the Petroleum Exporting Countries said the world will need 32.20 million barrels per day (bpd) of crude from its members next year, a fall of 60,000 bpd from this year.

OPEC leaders and participating N-OPEC countries have agreed to an extension to the current supply cut deal for nine months until March 2018 that aims to reduce global oil supply by 1.76 million barrels per day.

"According to the latest official data, Opec increased production by 0.3m barrels per day largely on the back of growing exports out of Nigeria and Libya, undermining its own supply restriction strategy".

The market will be closely watching OPEC's data on Wednesday, but it typically gives production numbers, not exports.

Crude oil prices remain under $50 a barrel. Market reaction was mixed, but not to such an extent that the decision takers expected support from US shale producers who continued their production. In addition, a decision by OPEC and key allies such as Russian Federation to tighten the spigots past year should enable Saudi Arabia to charge more for each barrel it sells.

U.S. West Texas Intermediate and international-benchmark Brent crude oil closed almost 1.50% higher on Tuesday in a wicked trading session.

Crude prices rallied after the American Petroleum Institute, an industry group, estimated that USA crude supplies dried up by 8.1 million barrels, with gasoline stockpiles also down. It further added that the catalyst could be further intervention by OPEC or a steady drop in US crude stockpiles and the nation's rig count.

Despite the slight downward revision, USA production is still set to break the 9.61 million bpd record from June 2015.

Before EIA released the storage report, Brent was up 1.9% and U.S. was up 2.4%.

Libya and Nigeria are both exempt from the output-restraint deal that has been observed by other Opec members and producers outside the group since January.

United States gasoline futures rose 1.2% and closed at $1.51 per gallon on July 11, 2017.

Against these doldrums, news of diminished USA output led to an oil rally in late June.

The production cap would come into play when Nigeria can stably pump 1.8 million barrels a day, Kachikwu said.

OPEC Production was up last month but offset by the fact that NON-OPEC production was down.

Oil supply, the EIA said, is poised to drop before the demand for oil starts to wane, meaning there is a period of high oil prices up ahead.


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