Nigeria will maintain it’s output of 2.2 million barrels per day, according to the outcome of the Organisation of Petroleum Exporting Countries (OPEC) meeting in Vienna.
This was disclosed at the 172nd ordinary OPEC meeting in Austria.
More than 20 OPEC and non-OPEC countries, in November 2016, agreed to collectively cut production by 1.8 million barrels a day in an effort to reduce the global supply glut that stalled crude oil prices.
The deal, which began on Jan. 1, was to end in June but has been extended to the first quarter of 2018.
Nigeria was exempted from the cut as at then due to activities of militants in the Niger Delta region.
Nigeria’s Minister of State for Petroleum, Dr Ibe Kachikwu, had at the Offshore Technology Conference in Texas, announced that he would push for an extension at the high-level meeting.
OPEC comprises 13 nations which collectively account for 40 per cent of global oil production, 73 per cent of the world’s oil reserves and set the tone for happenings in the oil industry. OPEC decided on Thursday in Vienna to extend cuts in oil output by nine months to March 2018 to further battle a global glut of crude.
OPEC delegates said the cuts were likely to be shared again by a dozen non-members led by top oil producer Russia, which reduced output in tandem with OPEC from January.
OPEC’s cuts have helped to push oil back above $50 a barrel this year, giving a fiscal boost to producers, many of whom rely heavily on energy revenues.
Oil’s earlier price decline, which started in 2014, forced Russia and Saudi Arabia to tighten their belts and led to unrest in some producing countries, including Venezuela and Nigeria.
The price rise this year has spurred growth in the U.S. shale industry, which is not participating in the output deal, thus slowing the market’s rebalancing with global crude stocks still near record highs.
Brent crude in early trading fell 1.3 per cent to around $53 per barrel as market bulls were disappointed OPEC would not deepen the cuts or extend them by as long as 12 months.
OPEC oil ministers are, however, continuing their discussions in Vienna after three hours of talks. Non-OPEC producers were scheduled to meet OPEC later in the day.
In December, OPEC agreed its first production cuts in a decade and the first joint cuts with non-OPEC, led by Russia in 15 years.
The two sides decided to remove about 1.8 million barrels per day from the market in the first half of 2017, equal to 2 per cent of global production.
Despite the output cut, OPEC kept exports fairly stable in the first half of 2017 as its members sold oil from stocks.
The move kept global oil stockpiles near record highs, forcing OPEC first to suggest extending cuts by six months, but later proposing to prolong them by nine months and Russia offering an unusually long duration of 12 months.
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