Ministers of the Organisation of the Petroleum Exporting Countries (OPEC) have agreed to raise oil supplies by about one million barrels per day (mbpd) starting July 1, 2018.
The decision of the organisation was made known to journalists on Friday in Vienna, after the 174th meetings of the OPEC Conference, by Suhail Al Mazrouei, the Minister of Energy and Industry, United Arab Emirates.
“Recalling the 171st OPEC Conference resolution reached on 30 November 2016 for a production adjustment of 1.2 mb/d and noting that OPEC Member Countries have exceeded the required level of conformity that had reached 152 per cent in May 2018.
“Accordingly, the Conference hereby decided that countries will strive to adhere to the overall conformity level of OPEC, down to 100 per cent as of July 1, 2018 for the remaining duration of the above mentioned resolution.
” The Joint Ministerial Monitoring Committee is expected to monitor and report back to the President of the Conference,” he said.
Also, the Executive Secretary of OPEC, Muhammad Barkindo reaffirmed OPEC’s continued commitment to ensuring stable markets for the mutual interest of producing nations.
He said that the decision would lead to improvement in market conditions, sentiments and the return of confidence and investment to the oil industry.
Meanwhile, the Minister of State for Petroleum Resources, Ibe Kachikwu said that out of the expected boost, OPEC countries would contribute about 700,000 while non-OPEC countries will account for the rest.
“OPEC will contribute about 700,000 barrels while non-OPEC will come up with the rest.
“Bear in mind that this is the expectation and individual quota is going to be worked out because some countries do not have the ability to pick up the numbers,” he said.
Also, the Nigerian National Representative to OPEC, Mele Kyari, said that the increase was likely to deflate the market, but not at a dramatic level.
He predicted that the market was likely to settle between 65 dollars to 72 dollars per barrel.
“When you increase supply and there is no parallel increase in demand at the same time, what you should expect is a downward trend in prices.
“But mind you that all the reports including that of OPEC have clearly shown that there is an increase in demand.
“So therefore it is possible that this increase will just be enough to balance the market. Therefore, I do not see a substantial fall in prices as a result of this activity,” he said.