OPEC moved on Monday to cap Nigerian oil output and called on several members to boost compliance with production cuts to help clear excessive global stocks and support flagging prices.
OPEC has agreed with several non-OPEC producers led by Russia to cut oil output by a combined 1.8 million barrels per day (bpd) from January 2017 until the end of March 2018.
OPEC states Libya and Nigeria were exempted from the limits to help their oil industries recover from years of unrest.
The deal to curb output propelled crude prices above $58 a barrel in January but they have since slipped back to a $45 to $50 range as the effort to drain global inventories has taken longer than expected.
Rising output from U.S. shale producers has offset the impact of the output curbs, as has climbing production from Libya and Nigeria.
A ministerial committee of OPEC and non-OPEC states that monitors the global oil pact said it had agreed Nigeria would join the deal by capping or even cutting its output from 1.8 million bpd, once it stabilizes at that level from 1.7 million bpd recently.
The monitoring committee, known as JMMC and which met in the Russian city of St Petersburg, did not give the timeframe for when this would happen, saying it would track Nigerian production patterns in the next weeks.
The committee did not back capping Libyan output as it said its production was unlikely to exceed 1 million bpd in the near future compared to its capacity of 1.4 million-1.6 million bpd before unrest erupted in 2011 and plunged the nation into chaos.
via Globe and Mail
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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