- Exceeds Output Cut Target
The Organisation of Petroleum Exporting Countries (OPEC) on Wednesday said Nigeria and its other members had achieved 101% adherence to crude oil output cut mandatorily agreed upon last year to curb huge supply glut.
This is coming as oil price rose to $58 per barrel yesterday hitting over 11-month high after major producers showed they were cutting crude output in line with their commitments on restraint.
Brent crude was up $58.71, a 2.18 per cent increase, while US oil gained 2.36 per cent to hit $56.86 a barrel.
Crude production by the OPEC increased for a seventh month in January, after the cartel and its allies agreed to ease supply curbs further, but the growth was smaller than expected.
OPEC Secretary-General, Dr Sanusi, Barkindo, expressed delight about the new development at the opening of the OPEC+ panel meeting on Tuesday.
“With the crude oil market currently switching into backwardation, we are hopeful that 2021 will be a good year for overall demand,” Barkindo said.
At the 26th meeting of the Joint Ministerial Monitoring Committee (JMMC), in Vienna, held via video conference under the chairmanship of Prince AbdulAziz bin Salman, the organisation expressed hope that the oil market will recover in 2021.
OPEC highlighted Nigeria’s efforts at meeting its own output cuts, describing it as commendable.
The committee emphasised the ongoing positive contributions of the Declaration of Cooperation (DoC) in supporting a rebalancing of the global oil market in line with the historic decisions taken at the 10th (extraordinary) OPEC and non-OPEC Ministerial Meeting on 12, April 2020.
The decision was to adjust downwards overall crude oil production, following the extraordinary hit taken by the commodity as a result of the COVID-19 pandemic.
The committee acknowledged the positive performance of participating countries, especially their adherence to the deal made in April last year.
“Overall conformity with the original production adjustments was 101 per cent, reinforcing the trend of high compliance by participating countries.
“The committee noted that since April 2020 ministerial meeting, OPEC and non-OPEC countries have adjusted oil production down by a cumulative 2.1 billion barrels, stabilising the oil market and accelerating the rebalancing process.
“The committee further noted that DoC participants pledged to achieve full conformity and make up for previous compensation short-falls, and stressed the importance of accelerating market rebalancing without delay. The progress of Nigeria in this respect was well noted,” it stated.
According to the cartel, while economic prospects and oil demand will remain uncertain in the coming months, the gradual rollout of vaccines around the world is a positive factor for the rest of the year, boosting the global economy and oil demand.
OPEC urged all participating countries to remain vigilant and flexible given the uncertain market conditions and to stay on the course.
The committee thanked the Joint Technical Committee (JTC) and the OPEC secretariat for their contributions to the meeting, while the next conference of the JMMC is scheduled for March 3, 2021.
