Indications emerged Wednesday that the Nigerian government is yet to decide whether it would participate in any production cuts ahead of the Organisation of the Petroleum Exporting Countries (OPEC) meeting slated for December 6.
Ibe Kachikwu, Nigeria’s oil minister, said on Wednesday that it was too early to say whether Nigeria would participate in any cuts; but there was “absolute resolve” within OPEC to stabilise the market.
The minister spoke when Saudi Energy Minister, Khalid al-Falih, visited him in Abuja for a meeting. But Mr al-Falih on his part stated that Saudi would not cut oil output on its own to stabilise the market.
OPEC and its allies led by Russia will meet in Vienna next week amid concerns over a slowing global economy and rising oil supplies from the United States, which is not involved in an existing agreement to restrain output.
Oil prices have been pushed below $60 per barrel this week from as high as $85 in October, prompting Saudi Arabia, OPEC leader, to suggest significant production cuts.
But the Kingdom’s decision has been met with uncertainty as U.S. President Donald Trump has asked that Saudi refrain from output reductions and help lower oil prices further.
The developments come against the backdrop of the crisis surrounding the killing of journalist Jamal Khashoggi at Saudi Arabia’s consulate in Istanbul, Turkey, in October.
The killing generated global condemnation even as Mr Trump backed Saudi Crown Prince Mohammed bin Salman despite calls from many U.S. politicians to impose stiff sanctions on the Kingdom.
On Wednesday in Abuja, the Saudi minister said signals from OPEC members Iraq, Nigeria and Libya were positive ahead of the organisation’s meeting next week as all ministers wanted to restore stability to oil markets.
Nigeria has been excluded from the previous round of cuts, which began in 2017, due to steep production declines caused by unrest in the Niger Delta region.
“We are going to … do whatever is necessary, but only if we act together as a group of 25,” Reuters quoted Mr Falih to have said, referring to OPEC and its allies led by Russia.
“As Saudi Arabia we cannot do it alone, we will not do it alone,” he added, stressing that “Everybody is longing (to) reach a decision that brings stability back to the market … I think people know that leaving the market to its own devices with no clarity and no collective decision to balance the market is not helping.”
Earlier in November, the Saudi official had said that abundant supply of oil may require OPEC and its allies to reduce output in 2019. He said supply may exceed demand by as much as 1 million barrels per day, or 1 per cent of global demand.
The move, analysts said, meant that OPEC and its allies may try to reduce production by that number.
But when asked on Wednesday whether cuts could be deeper than 1.4 million bpd, Mr al-Falih declined to answer.
By Wednesday afternoon, checks revealed that oil slipped, pressured by rising U.S. inventories and doubts over whether an OPEC-led output cut will be agreed next week.
The outcome of next week’s OPEC meeting “remains clouded by uncertainty,” Stephen Brennock of oil broker PVM told CNBC Wednesday.
Support PREMIUM TIMES' journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
TEXT AD: To advertise here . Call Willie +2347088095401...