02 June 2016, Abuja – The Venezuelan Energy Minister, Eulogio Del Pino, has described the unplanned disruption of crude oil production in Nigeria, Canada and Kuwait as the primary reason for the recent price recovery in the global oil market.
Del Pino, according to Bloomberg yesterday said the recent upward movement in prices of oil had more to do with unexpected supply disruptions in fields of some member countries of the Organisation of Petroleum Exporting Countries (OPEC) and not from OPEC’s strategy.
The report which THISDAY monitored in Abuja, had Del Pino describing unplanned disruptions in Nigeria, Canada, and Kuwait as effective measures which capped crude oil production, and then forced a ‘de facto’ production freeze.
He said this while oil ministers of the OPEC who are gathering in Vienna for the group’s biannual meeting expressed delights that the oil market was currently moving in the right direction as a supply glut dissipates.
The report said the United Arab Emirates (UAE) minister, Suhail Al Mazrouei and Nigeria’s, Dr. Ibe Kachikwu, had signalled that the strategy of letting low prices eradicate surplus production was working.
Al Mazrouei and Kachikwu, it said spoke with journalists in Vienna on this, in addition to some of the world’s biggest oil traders also agreeing that accelerating demand was helping to rebalance the market.
“From the beginning of the year until now, the market has been correcting itself upward,” Al Mazrouei was quoted to have said.
He added: “The market will fix itself to a price that is fair to the consumers and to the producers.”
His comments, the report added was echoed by Kachikwu to suggest renewed optimism among producers.
“I think the market trends are better now and the sense of urgency that spurred producers to mull an agreement to freeze production in April has dissipated.
“While prices are moving in the right direction, I think it needs more acceleration of the pace,” Kachikwu said.
However, Del Pino who still rues the decision of Saudi Arabia to block a freeze arrangement earlier in March because Iran wouldn’t participate, disclosed that more than three million barrels of daily oil production are currently out of the market.
He stated: “If you take into account what happened in the last three or four months, there has been a ‘de facto’ freeze.”
- This Day