The international oil benchmark, Brent crude, pared some of its recent gains as what seemed to be shaping up as a smooth OPEC+ meeting has hit some turbulence with an airing of grievances.
Brent, against which Nigeria’s oil is priced, fell by $0.90 to $47.71 per barrel as of 7:10pm Nigerian time on Thursday. Brent crude prices have pushed near $50 per barrel in recent days – their highest levels since March.
In April, the Organisation of the Petroleum Exporting Countries and its allies, a group called OPEC+, committed to record production cuts that were to gradually taper over two years as the global economy recovered.
The current 7.7 million barrels per day in cuts – roughly eight per cent of pre-pandemic demand – are scheduled to ease to 5.8 million bpd in January.
According to S&P Global Platts, the United Arab Emirates may be considering splitting from the group, while Iraq and Nigeria are appealing to pump more, and the recent vaccine-propelled rally in crude prices will test everyone’s resolve to see through their landmark supply accord.
An extension of current output cuts is still the likeliest scenario, but some hard conversations over the future of the deal – and the alliance itself -could complicate a decision.