The OPEC has directed Nigeria to cut crude oil production by an additional 939,000 barrels, media reports said. Furthermore, the OPEC has also decided to ramp up crude oil production by 500,000 barrels per day for the next two months.
The latest move by OPEC comes at a time when OPEC+ held a meeting discussing the plan of returning another 500,000 barrels per day of production to the market due to new Covid-19 induced lockdown.
The OPEC has set 1.829 million barrels per day as the production for the next three months for Nigeria. However, 1,516 million barrels per day has been set as the required per month production.
It is reported that countries such as the Kingdom of Saudi Arabia and Russia have a reference production of 11 million barrels per day. However, these countries will be allowed to pump only 9.1 million bpd.
The members and allies of the OPEC that have not complied in accordance with output curbs set in April last year is expected to submit a compensation plan.
OPEC, told the media, “The meeting reiterated the need to continue closely monitoring market fundamentals, including non-DoC supply and its impact on the global oil balance and overall market stability.”
The oil market sentiment has been buoyed due to the recent vaccine approval and improved assets markets. However, oil majors are expected to remain cautious because weak oil demand is still prevailing and refining margins are also less, while considering other uncertainties.