Brent crude, the commodity against which Nigeria’s oil is priced, dropped in price on Sunday despite the meeting of the Organisation of Petroleum Exporting Countries, Russia and other oil producing nations.
Our correspondent observed that Brent crude dropped by $1.36 to $31.48 per barrel as of 12.17pm Central Standard Time, while crude oil in OPEC Basket traded flat at $21.19.
OPEC and non-OPEC members, jointly referred to as OPEC+, had a Declaration of Cooperation during their ministerial meeting on Sunday and concluded on the curtailment of crude oil production by 9.7 million barrels.
Commenting on the ministerial meeting of OPEC+, Minister of State for Petroleum Resources, Timipre Sylva, said Nigeria joined its counterparts to bring into effect the agreement to cut 9.7 million barrels of supply following the alignment of Mexico.
He said the intervention of the United States resulted in Mexico agreeing to a cut of 100,000 barrels per day and to be complemented by an additional 300 KBOPD by the US producers.
“This will enable the rebalancing of the oil markets and the expected rebound of prices by $15 per barrel in the short term,” Sylva stated in a speech he personal signed on Sunday.
He added, “This also promises an appropriate balancing of Nigeria’s 2020 budget that has been rebased at $30 per barrel.”
He noted that as agreed, Nigeria would join OPEC+ to cut supply by 9.7 million barrels per day between May and June 2020, eight million barrels per day between July and December 2020 and six million barrels per day from January 2021 to April 2022.
The minister stated that based on reference production of Nigeria of October 2018 of 1.829 million barrels per day of dry crude oil, Nigeria would be producing 1.412 million barrels per day, 1.495 million barrels per day and 1.579 million barrels per day respectively for the corresponding periods in the agreement.
This, according to him, is in addition to condensate production of between 360 and 460 KBOPD, which are exempt from the OPEC curtailment.