OPEC Pegs Nigeria’s Oil Output at 1.8 Million bpd

• OPEC Pegs Nigeria’s Oil Output at 1.8 Million bpd

The Organisation of Petroleum Exporting Countries on Thursday agreed to extend curbs on crude oil outputs until the end of 2018.

Iran’s Energy Minister, Bijan Zangeneh, announced that Nigeria and Libya would be included in the oil output deal and an OPEC communique stated that the countries would not produce above 2017 levels in the new year, according to Reuters.

The Oman minister said that Nigeria had agreed to cap output at 1.8 million barrels per day.

The production cuts deal, which began on January 1 and called on OPEC countries and 10 non-OPEC producers led by Russia to cut a combined 1.8 million barrels per day in supplies to tackle oversupply and prop up prices, was in May extended by nine months to March 2018.

Nigeria and Libya, which were exempted from the cuts as they dealt with internal unrest that had targeted their oil infrastructure, had ramped up oil production in recent months as their security situations improved.

“OPEC extending the output cut till the end of 2018 was widely anticipated; however, suggestions that both Nigeria and Libya have decided to cap production is a bullish signal,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.

However, price reactions were mostly muted, with many analysts saying the nine-month extension was already priced in.

“Because they’re going to be meeting again in a few months, we’re just going to be doing this again,” said John Macaluso, an analyst at Tyche Capital Advisors in New York.

Though the deal looked set to go through, a final decision involving non-OPEC producers, including Russia, had yet to be announced.

Russia has been pushing for a clear message on how to exit the cuts, concerned that prices do not rally too quickly and that rival United States’ shale firms do not boost output further.

One of OPEC’s biggest problems while cutting supplies has been rising US output, which is gaining global market share and undermining the group’s efforts to tighten the market.