OPEC+ new Charter of Cooperation buys it some time

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A new Charter of Cooperation among the Organisation of Petroleum Exporting Countries and 11 non-member oil producing nations (OPEC+) may create a new window of opportunity for Nigeria amid concerns that the cartel’s influence in the global oil market is waning. Khalid Al-Falih, Saudi oil minister, was reported to have said that OPEC has agreed…

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OPEC-plus’ new Charter of Cooperation buys it some time

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A new Charter of Cooperation among the Organisation of Petroleum Exporting Countries’ and 11 non-member oil producing nations (OPEC+) may create a new window of opportunity for Nigeria amid concerns that the oil cartel’s influence in the global oil market was waning.

Khalid Al-Falih, Saudi oil minister was reported to have said that OPEC has agreed on a draft cooperation charter with the OPEC+ and is still working on which inventory metric to be used in the charter. The oil cartel had sought the buy-in of other big non-OPEC member countries, such as Russia, the world’s third largest oil producer, after the United States of America and Saudi Arabia. This was intended to stabilise the global oil market by cutting production.

The charter “has created one of history’s strongest producer partnerships, spanning the entire world from east to west,” Al-Falih said Tuesday. “Our objectives related to market stability are now matched by the horsepower needed to deliver them.”

Since the initial production cuts were agreed upon in late 2016, non-OPEC members like Russia have bolstered the Organisation’s ability to influence the global oil market. While OPEC controls less than 50 percent of the world’s crude oil production, the expanded coalition, known as “OPEC+,” controls a majority.

On July 1, OPEC and other allied major oil producers agreed to extend crude oil production cuts for nine months, a move designed to keep oil prices from falling as the United States of America’s production increases and concerns grow about global demand.

For Nigeria with economic fortunes tied to movements in oil prices, higher oil prices are a boon. This is so because Nigeria earns 95 percent of its dollars from selling crude oil. Anytime oil prices fall, they impact Nigeria’s foreign reserves. This is worsened because the … Read More...

Iran warns Opec ‘might die’ due to Russia-Saudi domination

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Iran’s oil minister has warned that the future of OPEC is in jeopardy over the growing dominance of Saudi Arabia and Russia in the cartel’s affairs.

The oil group and its allies are on course to extend production cuts of 1.2m barrels per day for at least another six months, after Iran said it would not block a deal struck at the weekend between Russian president Vladimir Putin and Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman.

But Bijan Zanganeh, Iran’s oil minister, warned that the future of the oil producers’ group was in the balance as the Saudi-Russia alliance was increasingly sidelining traditional members. “I have no difficulty with the extension of the cut,” Zanganeh told reporters as he arrived in Vienna on Monday for a meeting between Opec members.

“My problem is unilateralisation”, which was “threatening the existence of Opec . . . Opec might die”. His comments come as Opec and its allies are struggling to support an oil price that is on course to average less this year than in 2018, despite US sanctions hitting the output of Opec members Venezuela and Iran and the group enacting additional production cuts. Russia, which is not an Opec member, has allied with the cartel since late 2016 as members try to adjust to growing supply from US shale fields, which ended the $100-a-barrel oil era five years ago.

But in forging a close-knit relationship with Saudi Arabia, the largest producer in Opec and Iran’s major rival in the Middle East, Moscow and Riyadh have been accused of mounting in effect a takeover of the group. Russian president Vladimir Putin announced at the G20 in Japan at the weekend that he and Crown Prince Mohammed bin Salman had agreed the supply deal should Read More...

Bill to cripple OPEC gets Trump’s Whitehouse support, should Nigeria be worried?

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These days, the biggest risk facing the oil market rarely comes from geo-political shocks including chaos in the Middle East – not that this is not a factor still – tweets from Donald Trump, president of the United State has the capacity to send prices reeling as much as a bomb going off in Tehran could.

 

Against the backdrop of Trump’s frequent rants against OPEC for keeping oil prices too high, it was recently reported in the foreign press that a senior member of the Trump Whitehouse, supported the bill that will make it illegal for foreign nations to work together to limit fossil fuel supplies and set prices – the chief task of OPEC – demands more than a cursory introspection.

 

Republican and Democratic lawmakers who can’t even agree on the weather came together and through the House Judiciary Committee passed the No Oil Producing and Exporting Cartels Act, commonly known as NOPEC, clearing the bill for a vote before the full House of Representatives the same day their counterparts in the Senate supported the move.

 

The NOPEC Act was initially and introduced in June 2000 as a congressional effort to address the issue that, under federal law, foreign governments cannot be sued for predatory pricing or failing to comply with US antitrust laws. It would protect consumers against collusion and predatory pricing by foreign governments and international cartels, such as the Organization of the Petroleum Exporting Countries (OPEC).

 

OPEC is concerned

The NOPEC bill has never featured on the agenda of OPEC since it was introduced into the US Congress in 2000 but the organisation has spoken against it publicly. Since 2016 when the influence of shale oil bequeathed unto the oil markets the stability of mercury, and OPEC … Read More...

OPEC: Nigeria’s April oil production increases by 92,000 bpd to 1.81 million bpd

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Despite internal production crises, global efforts to curb oil glut and bolster crude prices, latest report from Organisation of Petroleum Exporting Countries (OPEC) reveals Nigeria’s records the second biggest oil production increase by 92,000 bpd in April to 1.8 million bpd.

According to independent sources, the 14-member OPEC said Nigeria’s crude oil production increased from 1.72 million bpd recorded in March to 1.81 million bpd in April 2019 by 92,000 bpd.

Since 2018 and first Quarter 2019, Nigeria oil production has being hovering round 1.7 million bpd compare to 1.6 million in 2016.

 

DIPO OLADEHINDE

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