Oil price rises, but Nigeria has not been obeying OPEC agreement
The price of oil has been rising gradually, as COVID-19 restrictions are eased around the world.
President Muhammadu Buhari. [Twitter/@BashirAhmaad]
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However, Nigeria is often listed as one of the countries that hasn't fully complied with output cut agreements outlined by the Organisation of Petroleum Exporting Countries (OPEC).
There’s been a slow recovery in fuel demand, with major producers seeking to limit supply and enforce output cuts.
Brent crude now trades for $44.63 a barrel.
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U.S. West Texas Intermediate (WTI) now goes for $42.49 a barrel.
OPEC and allies, including Russia, are focused on ensuring that members comply with output cuts, just so there is no glut or an oversupply in the market.
A glut will lead to further crash in the price of oil.
OPEC members during a meeting (AFP)
ASSOCIATED PRESS
Reuters reports that the OPEC+ group found that some members would need to cut output by 2.31 million barrels per day (bpd) to offset their recent oversupply.
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Among OPEC members, Iraq and Nigeria have been the least compliant, according to Reuters.
The United Arab Emirates, which made additional voluntary cuts in June, overproduced by about 50,000 bpd over the May-July period.
The internal report also flagged demand risks, showing that OPEC+ expects oil demand in 2020 to fall by 9.1 million bpd, up 100,000 bpd from its previous forecast.
If a prolonged second wave of infections hits China, India, Europe and the United States in the second half of the year, 2020 demand could fall by 11.2 million bpd, the report added.
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