Oil prices rise as OPEC meets

The price of crude oil rose on Thursday as the Organization of Petroleum Exporting Countries (OPEC) began its meeting.

Brent crude futures climbed 13 cents, or 0.2 per cent, to $83.23 a barrel by 0740 GMT, while U.S. West Texas Intermediate crude futures rose 17 cents, or 0.2 per cent, at $78.03 a barrel.

The benchmark oil contracts settled nearly 2 per cent higher the previous day amid hopes of some form of a price-supportive resolution from the OPEC+ group.

OPEC and its allies are meeting today to discuss additional oil output cuts for next year.

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

The decision came despite pressure from the United States and others advocating that the group increase its output.

In April, OPEC said it would start “a voluntary reduction” of 1.66 million barrels per day in its production of crude oil alongside other members of OPEC.

The cuts were to start in May and last through the end of the year, an official with the Saudi Ministry of Energy was quoted as saying by the Saudi state-run news agency, SPA.

The cut is in addition to the reduction announced by OPEC+ in October 2022, according to SPA.

In June, OPEC said it would extend the cut until 2024.

It noted that the decision was taken in light of the continued commitment of the OPEC and non-OPEC Participating Countries in the Declaration of Cooperation (DoC) to achieve and sustain a stable oil market and to provide long-term guidance for the market.

Earlier in October, the OPEC+ Joint Ministerial Monitoring Committee (JMMC), kept the group’s output policy unchanged.

Any rise in price favours Nigeria which relies mostly on oil for its revenue and foreign earnings. Meanwhile, the country has also been faced with pipeline vandalism and crude oil theft in its oil-producing region.

The Nigerian National Petroleum Company Limited (NNPC Ltd) had recently said oil thieves vandalised over 5,000 kilometres of oil pipelines connecting different parts of the country.

The Chief Executive Officer of NNPC Ltd, Mele Kyari, who disclosed this when he appeared before the Senate Committee on Petroleum (Downstream) said the continuous vandalisation of the pipelines was causing a huge loss to the NNPC Ltd while describing the situation as a ‘national calamity’.

“Over 5,000 kilometres of oil pipelines in the country are not working as a result of pipeline vandalism. Ten million litres of oil was lost from the volume pumped from Aba to Enugu at a time. The company has been unable to pump oil from Warri to Benin within the last 22 years and cannot connect to Ore.

“There is no amount of security measures that had not been taken to curb the crime without success, which, to us in NNPC Ltd, is substantially a national calamity,” Mr Kyari said.