Brent crude hits $83 per barrel as the Organization of Petroleum Exporting Countries (OPEC) meets today.
A review of global oil prices revealed that Brent crude was trading at $83.60 at 7:47 AM, GMT+1 on Thursday, November 30.
This is the first time Brent crude has reached $83 as crude producers have been gearing up for the OPEC meeting which was postponed due to a delay in some oil producers in Africa demanding higher oil production baselines. African members of OPEC were given a choice: either comply with reduced oil production quotas or demonstrate increased production capacity by a specified deadline by November 2023.
Despite their efforts to showcase improved production capabilities, African oil-producing nations still face substantial cuts in their production allocations. This has led to disputes and concerns about potential impacts on their oil industries’ investments.
As of November 28, there were ongoing efforts to persuade Angola and Nigeria to agree to the terms, with other African countries using their regional connections to mediate. Meanwhile, as of November 29, a consensus agreement had not yet been met.
Throughout 2023, Nigeria encountered challenges in meeting its OPEC production quota of 1.78 million barrels per day. However, in September and October 2023, Nigeria managed to produce 1.5 million barrels per day, marking its highest production level for the year. This production figure includes condensates.
According to Amena Bakr, the chief OPEC correspondent, there will be three online meetings today; an OPEC meeting, followed by the Joint Ministerial Monitoring Committee (JMMC), and then the OPEC-plus meeting where the final decision will hopefully be made.
The OPEC meeting starts at 11 am Vienna time. The JMMC at 2:30 pm Vienna time. Meanwhile, the OPEC-Plus meeting is planned for 3:30 pm Vienna time.
More on the Nigerian context
Despite not meeting its oil production quota yet in 2023, Nigeria has been taking steps to increase oil production by speaking to potential and existing upstream investors, targeting crude oil theft perpetrators with 35 suspects arrested last week alone and resolving host communities’ disputes immediately they arise.
As we approach 2024, the federal government has set a crude oil price benchmark of $77.96 for the upcoming budget, alongside an exchange rate of N750 to a dollar. Dr. Ayodele Oni, a Partner at Bloomfeld Law Practice, highlighted during a November 29 interview with Channels Television that this benchmark reflects the current global geopolitical factors that influence oil prices.
Discussing whether the oil sector can tackle the significant deficits facing the country in 2024, Dr. Oni emphasized that a combination of the oil and gas sub-sectors could aid Nigeria in mitigating some of these deficits.
He pointed out that Nigeria is focusing on transitioning into a gas economy, particularly through the Decade of Gas initiative.
Dr. Oni stressed the importance of the government pursuing and implementing the right policies to leverage these sectors effectively.
