Crude Oil Prices Surge as OPEC Discusses Output Cuts

Crude oil prices experienced an uptick on Thursday as the Organization of Petroleum Exporting Countries (OPEC) commenced its meeting.

Brent crude futures rose by 0.2 per cent to $83.23 a barrel, while U.S. West Texas Intermediate crude futures increased by 0.2 per cent to $78.03 a barrel.

The previous day witnessed a nearly 2 per cent increase in benchmark oil contracts, driven by expectations of a price-supportive resolution from the OPEC+ group, which includes OPEC and its allies.

The ongoing meeting aims to deliberate on potential additional oil output cuts for the upcoming year.

OPEC and its allies had previously agreed in October last year to reduce oil output by 2 million barrels per day in November, marking the deepest cut by OPEC+ since the 2020 COVID-19 pandemic.

This decision was made despite external pressures, including calls from the United States, advocating for increased output.

In April, OPEC announced a voluntary reduction of 1.66 million barrels per day in crude oil production, extending through the end of the year.

The commitment to stabilizing the oil market and providing long-term guidance led to an extension of the cut until 2024 in June.

The rise in crude oil prices is advantageous for Nigeria, a country heavily dependent on oil for revenue and foreign earnings.

However, Nigeria faces challenges such as pipeline vandalism and crude oil theft in its oil-producing region.

The Nigerian National Petroleum Company Limited (NNPC Ltd) recently reported that over 5,000 kilometres of oil pipelines in the country have been vandalized, resulting in significant losses.

Mele Kyari, the CEO of NNPC Ltd, described the situation as a ‘national calamity,’ highlighting the ongoing challenges faced by the company in curbing pipeline vandalism and crude oil theft.

The issues persist despite various security measures undertaken, causing substantial losses for NNPC Ltd.

Source: Premium Times