…Country to be asked to cap before November
Opeoluwani Akintayo & Michael James
with Agency Reports
10 July 2017, Sweetcrude, Lagos — Nigeria has been invited to the Organisation of Petroleum Exporting Countries, OPEC’s next meeting on July 24.
Kuwait Oil Minister Issam Almarzooq said Nigeria was invited alongside Libya, to discuss their crude output.
Both countries have kept increasing outputs since their exemption from the cut deal.
Nigeria was exempted due to the uprising in the Niger Delta which crippled the country’s oil production to as low as one million barrels per day.
Libya on its part was faced with political unrest which also affected output.
Shipping data in July had also shown that Nigeria had booked two million barrels per day for loading in August.
Issam Almarzooq said both countries would be asked to cap production in order to support the market.
The meeting would hold in St. Petersburg, Russia, on July 24.
Almarzooq is chairman of the committee monitoring the compliance of OPEC and non-OPEC suppliers with output cuts that started in January and have been extended to March.
“We invited them to discuss the situation of their production,” Almarzooq said. “If they are able to stabilize their production at current levels, we will ask them to cap as soon as possible. We don’t need to wait until the November meeting to do that,” he said, referring to the upcoming OPEC meeting scheduled for Nov. 30.
Prices of crude fell last month due to market concerns that the cuts from other producers are being disrupted by production in Nigeria, Libya, Iran and U. S shale producers.
Libya’s oil output has climbed to more than 1 million barrels a day for the first time in four years. Nigeria’s production rose 50,000 barrels a day in June, according to a Bloomberg survey.
“Capping Libya and Nigeria might help but won’t cut the supply by much,” Abdulsamad Al-Awadhi, a London-based analyst and Kuwait’s former representative to OPEC, said Monday.
“OPEC needs to have better compliance, and it must respect the right of Libya and Nigeria to go back to the market. Other countries that raised output while Libya and Nigeria are out should do more and give space to these two countries to go back to the market.”
Almarzooq said he sees the oil market moving in the right direction. Growth in the number of operational oil rigs has started to slow, and crude inventories are declining, he said. Benchmark Brent crude, which has fallen 17 percent this year, gained as much as 47 cents on Monday in London and was trading at $46.94 a barrel at 7:24 a.m. local time.
OPEC’s Secretary General, Mohammed Barkindo, said asking both countries to cut would have to be a joint decision.
According to him, it is still too early to discuss deeper cuts by the Group and its allies.
Almarzooq said OPEC/non-OPEC ministerial monitoring committee will discuss the impact of the output curbs on the market at the July 24 meeting, however, further cuts under the current agreement is not on the agenda, he said.
“It is too early to discuss deeper output cuts by OPEC/non-OPEC producers participating in the agreement to curb production,” Almarzooq said.
“We just finished the meeting in May and we need to give it more time”, he added.