• Kachikwu highlights Why Nigeria’ll resist oil cut

The price of crude oil has stabilised at $54.25 as the Organisation of Petroleum Exporting Countries, OPEC, predicted increased stability of the market, yesterday.

The price, which was also over $54 per barrel the previous day was said to have stabilised at that level because of the near balance of demand and supply in the market. Specifically, the price of Brent and WTI stood at $54.25, while that of WTI stood at $48.38 per barrel.

Also, the price of OPEC basket of 14 crudes, including Nigeria’s Bonny Light, stood at $51.82 per barrel. According to OPEC, “the price of OPEC basket of 14 crudes stood at $51.82 a barrel on Monday, compared with $52.53 the previous Friday, according to OPEC Secretariat calculations.

‘’The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).”

However, in its monthly report released, yesterday, OPEC stated that the world economic growth had been revised up for 2017 to 3.5 per cent from 3.4 per cent, while the growth forecast for 2018 remains unchanged at 3.4per cent.

It stated that: “OECD growth has performed better-than-anticipated in the current year – particularly the Euro-zone and to some extent in the US – and is now forecast to grow by 2.2 per cent in 2017 and 2.0 per cent in 2018.

“India is expected to grow by 6.9 per cent in 2017 and 7.5 per cent in 2018. Brazil and Russia are both forecast to expand their recovery to 0.5 per cent and 1.5 per cent in 2017, respectively, followed by growth of 1.5 per cent and 1.4 per cent in 2018.”

‘’China is expected to grow by 6.7% in 2017 and 6.3% in 2018. World Oil Demand World oil demand growth in 2017 is expected to rise by 1.42 mb/d after an upward revision of around 50 tb/d. ‘’ adjustment mainly reflects better-than-expected data from OECD region for the 2Q17, particularly OECD Americans and Europe, as well as China. In 2018, world oil demand is anticipated to grow by 1.35 mb/d, an increase of 70 tb/d from the previous report.

‘’This reflects higher growth expectations for OECD Europe and China. World Oil Supply Non-OPEC oil supply is expected to grow by 0.78 mb/d in 2017, unchanged from the last month due to offsetting revisions in Kazakhstan and US supply.

‘’In 2018, non-OPEC oil supply is forecast to grow by 1.0 mb/d, following a downward revision to Russia and Kazakhstan, totalling 0.1 mb/d. OPEC NGLs and non-conventional liquids production are seen averaging 6.49 mb/d in 2018, representing an increase of 0.18 mb/d, broadly in line with growth in the current year.

‘’Balance of Supply and Demand Based on the current global oil supply/demand balance, OPEC crude in 2017 is estimated at 32.7 mb/d, around 0.5 mb/d higher than in 2016. Similarly, OPEC crude in 2018.”

In the meantime, Nigeria will resist any attempt to curb its oil production, the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, has said.

The minister spoke ahead of the countries meeting with the Organisation of Petroleum Exporting Countries (OPEC) and Russia before the end of the month.

Nigeria and Libya, two members of the oil cartel enjoying exemption from oil production cut deal have been invited to an OPEC Committee meeting scheduled for September 22 in Vienna, Austria.

But 10 days ahead of the meeting where the latest developments in the oil sectors of both countries would be reviewed, Kachikwu gave reasons Nigeria must not be told to cap its oil production quota.

Kuwait’s Oil Governor Haitham al-Ghais told Al-Rai newspaper penultimate week that the oil cartel will be consulting with Nigeria and Libya to review the latest development in their oil sectors.

He said the group will hold a technical committee meeting on September 20, looking at the continued effects of the United States (U.S.) shale oil on the global market and the impact of Hurricane Harvey.

Ghais said: “The amount of production affected by the hurricane is estimated at 700,000bpd, which may strengthen the status of the market.”

He added that U.S. production had increased by 500,000bpd so far this year, compared to last year’s.

It was learnt that the September 20 meeting will be followed by another meeting on September 22, where a committee overseeing the deal, composed of oil ministers from Kuwait, Russia, Venezuela, Algeria, Oman and Saudi Arabia, would be in attendance.

The Nigerian position may pose a threat to the cartel’s effort to cut global supplies and boost crude prices towards $60 a barrel. The price prices hovered around $54.42 yesterday.

Kachikwu told the Financial Times that Nigeria’s energy sector was still suffering from years of violent disruptions and needed more “recovery time” before joining a supply deal agreed last year between some of the world’s biggest oil producers.

The minister, who was at OPEC meetings, said in an interview, that Nigeria would not consider sealing its production until at least March next year.

According to him, there has been no proof that the country’s rebound in production would last.

“We have a nine-month exemption period within which to come back to the table,” Kachikwu said, referring to the decision to extend the near two million barrel a day supply cut deal from June.

“You need that timeframe to see if any recovery is sustainable,” the minister explained.

His stance puts Nigeria on a potential collision course with other OPEC members as the country’s output has rebounded strongly in the past 12 months, blunting the effectiveness of a deal between 24 countries to shave almost two per cent of global oil output.

Nigeria and Libya were exempted from the cuts due to disruptions of oil production by militants in the Niger Delta. The agitations of the restive militants and the internal crisis in Libya, led to serious drop in oil output in both countries.

However, productions have improved following negotiations with leaders from the region. The Pan Niger Delta Development Foundation (PANDEF) has been negotiating with the Federal Government as part of efforts to restore peace to the oil producing region.

Nigeria’s production rose by 50,000 barrels a day in June, according to a Bloomberg survey.

Vanguard with additional report from Nation