…As OPEC moves to enforce 500,000 bpd oil output cut
By Udeme Akpan
THE price of Bonny Light, Nigeria’s premium oil grade, has risen further from $66.07 to $67.37 per barrel in the global market, as the Organisation of Petroleum Exporting Countries, OPEC, moves to enforce its recent 500,000 barrel per day, bpd oil output cut.
According to OPEC, total cuts from different nations, including United Arab Emirate, Kuwait, Iraq and Russia are expected to culminate in the withdrawal of 1.7 million bpd from the market, thus pushing oil price to about $70 per barrel in 2020.
This means that Nigeria could record over $9.00 per barrel excess revenue should oil price remains stable as the government had already benchmarked its 2020 budget reference price at $57.00 per barrel.
Meanwhile, in a statement sent to Vanguard, OPEC which remains optimistic that the market would be stable stated: “Recalling the ‘Declaration of Cooperation’ (DoC) reached on 10 December 2016 between OPEC and non-OPEC producing countries, reaffirming the continued commitment of the participating producing countries in the DoC to a stable market, the mutual interest of producing nations, the efficient, economic and secure supply to consumers, and a fair return on invested capital, following deliberations on the immediate oil market prospects and the outlook for 2020, the potential consequences of these developments on global inventory levels, as well as overall market and industry sentiment, and noting the continued consultative efforts with consuming countries, The 7th OPEC and non-OPEC Ministerial Meeting, hereby decided for an additional adjustment of 500,000 bpd to the adjustment levels as agreed at the 175th Meeting of the OPEC Conference and 5th OPEC and non-OPEC Ministerial Meeting.