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Whereas crude oil prices fell on Monday after the decision by the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC members to raise crude supplies to about one million barrels by starting from July 1, Nigeria’s Bonny Light crude oil also increased from $73.04 a barrel to $74.60 per barrel during the trading hours on Monday.
OPEC ministers at the 4th OPEC and non-OPEC Ministerial Meeting held in Vienna, Austria at the weekend, decided that countries will strive to adhere to the overall conformity level, voluntarily adjusted to 100 per cent, as of 1 July 2018 for the remaining duration of the ‘Declaration of Cooperation’ (DOC) and for the JMMC to monitor the overall conformity level and report back to the OPEC and non-OPEC Ministerial Meeting.
OPEC’s move was aimed at compensating producers for production loss at a time of rising global consumption, meaning that any country with spare capacity will be able to boost production.
It would be recalled that Nigeria was originally exempted from the initial output capping due to the volatility in the Niger-Delta, which brought the country’s crude oil down to less than one million barrel per day.
OPEC and non-OPEC removed about 1.8 million (bpd) from the market to boost crude oil prices.
Though crude oil prices witnessed a little increase on Friday while the OPEC meeting was going on, but international benchmark for oil prices – Brent crude crashed from $75.32 a barrel to $74.44 per barrel.
But West Texas Intermediate (WTI) went down by 0.3 per cent to settle at $68.40 a barrel.
OPEC Secretary General, Mohammad Sanusi Barkindo, said ‘Declaration of Cooperation’ literally rescued the oil industry from its worst ever downturn and now constitutes a fundamental and essential feature of the ‘new world of energy’.
He said over the last 18 months, this cooperation has helped return more balance to the oil market, more optimism to the industry and has had a positive impact on the global economy and trade worldwide.
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