Crude oil price slumps to $30
The suggestion on Tuesday by Nigeria's Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, for an emergency meeting of the Organisation of Petroleum Exporting Countries amid the sustained oil price slump met with opposition from another member of the cartel, the United Arab Emirates.
The global benchmark Brent crude extended its decline on Tuesday, slipping towards $30 per barrel for the first time since April 2004, before rising slightly above $31 per barrel. But the pick-up was short-lived as Brent later fell below $31.
Kachikwu, who briefly served as OPEC president last year before Nigeria's tenure expired on December 31, was quoted as saying that OPEC would soon make efforts to convene before the next scheduled meeting in June as the slump in oil prices was hurting producers, including the world's biggest exporter, Saudi Arabia.
The 13 members of the OPEC will work toward meeting in early March, Kachikwu said in an interview in Abu Dhabi on Tuesday.
Bloomberg quoted him to have said that members were already engaged in informal discussions with some non-OPEC producers, including Russia, to join any future production cut to shore up prices, he said.
'We are definitely looking at a time frame in very early March. You will very necessarily have to have an OPEC meeting because the group first has to meet and decide on its position before having formal meetings with other producers to coordinate a cut,' he said.
Brent crude closed at $43 per barrel on the day of the last OPEC meeting on December 4, and was trading at $30.54 per barrel at 6.10pm Nigerian time on Tuesday.
OPEC, which supplies about 40 per cent of the world's oil, decided not to cut production in December, potentially worsening a glut created after producers from the US to Russia and Saudi Arabia pumped more than demand warranted.
The UAE, one of the Gulf nations in OPEC, has moved to quash the talk of a potential emergency meeting, with its Energy Minister, Suhail bin Mohammed al-Mazrou, saying the current strategy by the cartel was working.
'I'm not convinced OPEC alone can change or can solely unilaterally change this strategy just because we have seen a low in the market,' Mazroui was quoted by Reuters as saying.
He stated that while the first half of 2016 would be tough for the oil market, there would be a gradual recovery later in the year, aided by an expected drop in non-OPEC production.
'I think all the members, including Iran, have the right to increase their production. I don't think we are going to restrict anyone,' Mazroui said.
A former Director of Research at OPEC, Chief Mike Olorunfemi, said in a telephone interview with one of our correspondents, 'If the price should go below $30, there is likelihood that OPEC will want to meet. But the Iran and Saudi Arabia tension has added a new dimension to the problem.
'So, Saudi Arabia will not really want to come and meet because the fall in oil price affects Iran more than Saudi Arabia. And wherever Saudi Arabia moves to, that is where you will find the UAE and Kuwait.'
The Head of energy Research, Ecobank Capital, Mr. Dolapo Oni, is of the view that OPEC is really not somewhere where Nigeria has a lot of clout.' - Punch.