OPEC member and crude oil producer Nigeria are backing the producer group’s output cuts to push prices down and more affordable for key consumers.
The country’s representative and Nigerian National Petroleum Corp owner Mele Kyari mentioned that the oil prices were very high and started to necessitate producers and consumers.
According to Kyari, the producers should be aware that if the prices are too high, they will start losing customers. Thus producers should produce at that level that is affordable to their customers.
In 2021, there is more than a 50% increment in the prices of oil.
If you want to decrease the prices, you need to increase supply. And that’s how OPEC is going to intercede to see how they can bring down costs.
Nigeria relies entirely on fuel imports for its needs. And the increment in oil prices is hurting Nigeria severely.
After years of neglect, Nigeria’s all four refineries of capacity 445,000 b/d offline now. And because of this occurrence, the country is wholly reliant on imports of refined products.
The key customer of many OPEC producers, and the world’s third-largest consumer of crude, India, recently revamped its call for the alliance to phase out its production cuts. And it is compiling the reason that the recent price increase is hurting the economy.
August Strategy for OPEC
The 23-country OPEC+ alliance is scheduling to convene July 1 to decide production strategy for August by considering many oil forecasters to be the month in which oil demand peaks every year.
Analysts are expecting an increase in production somewhere between 500,000 b/d and 1 million b/d.
The OPEC+ alliance’s collective production cuts down to about 5.3 million b/d by increasing 500,000 b/d in quotas for August.
And the continuation of the unwinding of the historic 9.7 million b/d cuts that were implemented over May-July 2020.