By Udeme Akpan
The Organisation of Petroleum Exporting Countries, OPEC, has extended its oil output cuts of 1.8 million barrels per day, bpd, by nine months to tackle oversupply and achieve increased stability in the market, excluding Nigeria and Libya.

OPEC

OPEC disclosed in a statement to journalists that following the conclusion of the 172nd meeting of the Conference of the Organization of the Petroleum Exporting Countries, OPEC, yesterday, at the OPEC secretariat in Vienna, Austria, ministers from OPEC member countries met with their counterparts from non-OPEC oil producing countries that participated in the Declaration of Cooperation of 10 December 2016.

It stated that: “Today’s second OPEC and non-OPEC Ministerial Meeting was jointly chaired by HE Khalid A. Al-Falih, President of the OPEC Conference, and Minister of Energy, Industry and Mineral Resources of the Kingdom of Saudi Arabia, and HE Alexander Novak, Minister of Energy of the Russian Federation.

‘’The OPEC and non-OPEC ministerial meeting recalled the earlier November 30, 2016 decision by OPEC member countries to implement production adjustments effective January 1, 2017, for a six-month period, and the subsequent decision of participating non-OPEC producers to the Declaration of Cooperation to also implement production adjustments on December 10, 2016, for the same period.

‘’The parties noted that OPEC member countries met earlier in the day on May 25, 2017, as part of the 172nd meeting of the OPEC conference, where they took into account current oil market conditions, analyzed oil market developments since the OPEC Conference last met in Vienna at the end of November, and reviewed the oil market outlook for the remainder of 2017.”

Oil price crashes back to $51.96 bpd

Meanwhile, the oil prices that rose in excess of $54 per barrel on Wednesday crashed back to $51.96 per barrel, yesterday, as a result of speculation over supplies.

Commenting on the issue, Dr. Diran Fawibe, Chairman of International Energy Services Limited, disclosed in an email to Vanguard that the price of oil kept fluctuating.

He said: ‘’The new price of $54 per barrel should be seen as market response to the possible decision of OPEC to extend the production cut, which undoubtedly will reduce the glut or mop up excess supply of oil in the market.

“What we may expect in the medium term is price hovering around $50 per barrel, depending on the market perception of oil supplies to world oil market.