- Nigeria to Cut Crude Oil Production
After months of producing above its cap limit, Nigeria has agreed to finally cap crude oil production in accordance with December 2018 OPEC+ agreement.
A crude oil tracking-data, Bloomberg, showed Nigeria is pumping 2.2 million barrels per day (mbpd) in August, higher than the 1.685 million bpd quota agreed in December 2018.
While another independent energy research company, S&P Global Platts, reported that Nigeria produced 1.93 million bpd in July.
The Organisation of Petroleum Exporting Countries (OPEC) agreed to cut oil production by 1.2 million bpd in December 2018 for six months and extend the accord after the US and China failed to reach a trade agreement.
Despite the reduction, crude oil price has dropped from $75 a barrel to $60, suggesting that other global factors remain OPEC main issues.
OPEC, on Wednesday, cut crude oil demand for 2020 by 60,000 barrels per day to 1.08 million barrels per day.
The cartel attributed the decision to a weaker global outlook amid the uncertainty surrounding the US-China trade war and Brexit.
In the monthly report released by OPEC, the cartel predicted that global growth would ease to 3.1 percent from its initial projection of 3.2 percent for 2020, saying strong growth in Shale supply would crude oil impact price in 2020.
“This highlights the shared responsibility of all producing countries to support oil market stability to avoid unwanted volatility and a potential relapse into market imbalance,” the report said.
Therefore, Joint Ministerial Monitoring Committee, OPEC, said countries like Nigeria and Iraq producing above their stipulated quota must conform despite conformity currently at 136 percent.
It said, “All participating countries present, particularly those who are yet to reach full conformity with their adjustments, were unequivocal in providing steadfast assurances of their determination to achieve at least 100 per cent conformity for the remainder of the year.
“Those countries who have over-conformed also reiterated their voluntary contribution. Resultantly, overall conformity will be brought to record levels.”
The new Minister of State for Petroleum Resources, Chief Timipre Sylva, pledged on Thursday to reduce crude oil production and operating within stipulated quota.