Nigeria may be close to heaving a sigh of relieve in its quest to reap good fortunes from the oil industry, following Iraq’s, agreement yesterday to join Nigeria, Saudi Arabia and others to freeze crude production, the good news is that it would likely increase crude price at the International market.
This is coming after the Minister of States, Petroleum, Ibe Kachikwu, had expressed doubt over possible agreement from Iraq to cut production in the expected Organisation of Petroleum Exporting Countries, OPEC’s meeting slated for next month.
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The body of oil producing nation’s plan to freeze output in her last meeting ended in a bad note as Saudi Arabia refused to concede freeze without Iran coming on board.
For Nigeria, this may impact positively on its fortunes amidst the downturn of its economy, following incessant attacks on facilities which has dropped production drastically to a lower level.
The result of this impact also affected the sponsoring of the country’s budget and other pending projects currently suffering setback due to lack of funds.
It was, however, revealed that the Prime Minister of Iraq, Haider al-Abadi, said that it will support OPEC’s decision to freeze oil production in order to prop up the downturn of crude price at the international.
According to him, “We would freeze production at the OPEC meeting, provided Iraq will support the group’s agreement.”
Meanwhile, Iraq’s oil Minister, Jabar al-Luaibi, had earlier noted that the country plans to play a very active role with other OPEC members to support prices while at the same time expanding its own output, which now stands at about 4.6 million barrels per day.
Meanwhile, oil futures rose yesterday, supported by production suspensions in the US Gulf due to an expected tropical storm and speculation that producers meeting in Algeria next month will act to prop up prices.
Oil and gas operators in the US Gulf of Mexico have shut production equal to 168,334 barrels-per-day, bpd, of oil and 190 million cubic feet per day of natural gas as a precaution against a tropical storm, the US Bureau of Safety and Environmental Enforcement said on Monday.
Moreover, Shell’s Chief, Energy Adviser, Wim Thomas, has said that the huge global oil oversupply that has weighed on prices for the past two years may not clear until the second half of 2017.