Tuesday, 11 October 2016

Oil prices hit $53



The Russian President Vladimir Putin has agreed to put measures to cap oil production.
An effort OPEC is trying to make to drive market stability in recent times.

Putin agreeing to join OPEC will help implement output freeze. He even went further suggesting that  his country, which is one of the top three producers of oil, may even agree to a production cut to drive market stability.

Brent Crude, the international benchmark for oil, was trading at $53.55 in London yesterday, while West Texas Intermediate (WTI) was going for $51.45 per barrel.

For Nigerians it is a welcome  development  because its 2016 budget pegged at $38 per barrel oil benchmark but has faced with severe shut in and force majeure by oil majors as a result of vandalism by militants from the volatile oil rich Niger Delta region.

Putin said: “Russia supports the recent initiative of OPEC to fix oil production limits Nation gathered.

“The demand for traditional energy supported not only the motorisation and electrification of such huge countries and economies as China and India, but also by the continuing participation of oil and gas products in the most diverse areas of human life, in industrial processes.”

OPEC concluded at its 170th ordinary meeting in Algiers, that the oil cartel was going to peg output between 32.50 million barrels per day (bpd) to 33.0 million bpd.

The deal will see OPEC drop 600,000 barrels of its current market share of 33.6 million bpd.

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