Brent Crude Rises To $37 a Barrel Ahead of OPEC Meeting

• Brent Crude Rises To $37 a Barrel Ahead of OPEC Meeting

The Brent Crude oil rose from $33.59 per barrel it traded on Wednesday to $37.84 on Monday during the Asian trading session.

Brent crude oil, against which Nigerian oil is priced, rose ahead of OPEC and allies meeting scheduled for this week as investors and traders await additional production cuts or better compliance levels.

Oil price had erased over 61 percent of its market value this year due to the COVID-19 pandemic that plunged its market demand and weighed on the entire global economy.

With global oil supply rising to a recorded high in April, OPEC plus was forced to agree to a 9.7 million barrels per day production cuts from the month of May. An agreement the members are looking to solidify this week, especially after data shows compliance level was just 74 percent in the month.

Countries like Nigeria, Iraq and other oil-producing nations struggling with fiscal buffers needed to cushion the negative impact of COVID-19 failed to comply with the accord in April.

Nigeria’s compliance level was 19 percent while the Iraq compliance level stood at about 38 percent, according to a survey published by Reuters.

The group managed to cut just 5.91 million barrels per day to a production level of 24.77 million bpd in April, about 4.48 million bpd below the 9.7 mbpd the group agreed to cut.

However, despite the low compliance level, the 24.77 mbpd recorded in April was the lowest for the group since 2002. Highlighting the reason for the noticeable surge in crude oil price on Monday.

Experts are now predicting better compliance, especially with the projected surge in demand due to the increase in numbers of nations reopening for business activities.