• Faults Saudi’s market share policy
Oscarline Onwuemenyi 12 February 2016, Sweetcrude, Lagos – Minister of State for Petroleum, Dr. Emmanuel Kachikwu is bullish over the future of oil. He has predicted that the current crude price crash may just be a temporary set back which may end before December this year.
Kachikwu, who declared that the Organisation of the Petroleum Exporting Countries, OPEC, was not expecting crude oil prices to enter the region of $20 to $30 per barrel, predicted that the 2016 average would be between $40 and $50.
He said, “I am actually optimistic that 2016 would end on an average of $40 to $50 barrel type level, but the first quarter would be very rough.
“I don’t expect to see it (oil) going to the twenties, I expect it on the fringes of thirties for maybe a month, two months, I expect it to see it to begin to climb.”
Kachikwu also faulted Saudi Arabia’s insistence to keep oil market share despite dwindling oil prices, saying it was a policy “gone too far.”
“For us that policy is going too far, we need to sit back and see, how can we balance the need to protect market share, with the survival of the business and the survival of the countries who run these businesses.
“There is a lot of energy around, and meeting won’t make any meanings except you have the protagonists agree to a common position,” he said.
At its December 4 meeting in Vienna, Austria, OPEC ministers, propelled mainly by Saudi Arabia, voted not to change the organisation’s strategy of defending its market share as a way of combating a supply glut that has sent oil prices crashing many folds.
Since OPEC chose to defend its market share, and let prices sink, over 44 percent plunge in crude has slashed members’ revenues by almost half a trillion dollars. Undeterred, the group has pressed its strategy to batter rival producers.
Saudi Arabia, OPEC’s biggest member, appears determined to see through its plan to eliminate a supply glut by squeezing out competitors like US shale drillers, even as the resulting price collapse spurs dissent from Venezuela, Algeria and Iran.
Nigeria has joined the fold of the dissenting nations with Kachikwu’s latest outburst against the Saudi policy.
For some OPEC members opposed to the kingdom’s plan since they unveiled it in November 2014, the cost has been too high.
Venezuela, which faced a 10 percent economic contraction last year that would be the steepest in the world, has repeatedly called for a summit between OPEC and other producers to end the crisis.