Amidst the ongoing meeting of the Organization of the Petroleum Exporting Countries (OPEC), crude oil prices saw a modest increase on Thursday, signaling potential market adjustments.
Brent crude futures edged up by 0.2%, reaching $83.23 a barrel, while U.S. West Texas Intermediate crude futures also rose by 0.2%, standing at $78.03 a barrel as of 0740 GMT.
The upward movement in oil prices follows a nearly 2% surge in benchmark oil contracts the previous day, driven by anticipations of a supportive resolution emerging from the OPEC+ discussions. OPEC and its allies are convening to deliberate on the possibility of additional oil output cuts for the upcoming year.
In October 2022, OPEC+ had agreed to a significant oil output reduction of 2 million barrels per day in November, marking the deepest cut since the 2020 COVID pandemic. This decision, despite pressure from the United States and other voices advocating for increased output, showcased the alliance’s commitment to stabilizing the oil market.
OPEC’s commitment to production cuts continued in April, with a voluntary reduction of 1.66 million barrels per day, which extended through the end of the year and was further prolonged until 2024 in June. The decision reflects the sustained dedication of OPEC and non-OPEC Participating Countries to maintaining a stable oil market.
For oil-dependent nations like Nigeria, any rise in crude oil prices is advantageous. Nigeria, grappling with pipeline vandalism and crude oil theft in its oil-producing regions, faces economic challenges. The Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC Ltd), Mele Kyari, recently revealed the dire situation before the Senate Committee on Petroleum (Downstream).
Kyari stated, “Over 5,000 kilometres of oil pipelines in the country are not working as a result of pipeline vandalism,” describing the continuous sabotage as a ‘national calamity.’ He highlighted the substantial losses incurred by NNPC Ltd due to pipeline disruptions and emphasized the gravity of the situation, despite extensive security measures taken to curb the criminal activities.
As OPEC discussions unfold, the global oil market awaits potential decisions that could influence the crude oil prices in the coming months.