Nigeria says it is not opposed to joining OPEC cuts

The combined cap on oil output for Opec and non-members was agreed at around 1.8 million barrels per day.

With over a dozen other countries expected to join the cartel's efforts, the agreement is likely to cut off about 2% of the world's oil supply through March 2018, extending a decision the OPEC-led coalition reached previous year.

Global oil cuts have helped push crude prices above $50 a barrel in 2017, which has helped member-nations sustain their revenues, as majority of them rely heavily on energy revenues.

OPEC and non-OPEC oil producers are attending the 172nd OPEC meeting in Vienna to discuss the possibility of extending the oil production cut, possibly by as long as 12 months, to help clear a global inventory overhang and to support crude prices.

Similarly, Nigeria's Minister of Finance, Kemi Adeosun, said, the deal gave the nation an opportunity to plan.

According to a statement, OPEC and the non-OPEC parties "recognized the need for continuing cooperation among oil exporting countries in order to achieve a lasting stability in the oil market".

The global glut of supply has proved hard to draw down even after OPEC agreed to cut production in the first half of the year.

The group of top producers originally agreed to slash output in November in an attempt to reduce a global oil glut and boost prices.

Iranian Oil Minister Bijan Zanganeh, who often clashed with Saudi Arabia at previous OPEC meetings, said he would follow the majority of members in their decision and added there was no proposal on the table for deeper cuts.

The Opec has a self-imposed goal of bringing stocks down from a record high of three billion barrels to their five-year average of 2.7 billion. The price of West Texas Intermediate oil, the US benchmark crude, declined 3.8% to $49.39 at 1:06 p.m.

Suhail Mohamed Al Mazrouei, Minister of Energy of the United Arab Emirates, UAE, speaks to journalists prior to the start of a meeting of the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria, Thursday, May 25, 2017.

"They're still staring down infrastructure build-out in some member countries and rising output here in the US", John Kilduff, a partner at Again Capital, a New York-based hedge fund that focuses on energy, said by telephone.

Hence, the oil market is disappointed that OPEC did not deliver more today, either in terms of deeper production cuts or a longer extension.

OPEC also faces the dilemma of not pushing oil prices too high because doing so would further spur shale-oil production in the USA, the world's top oil consumer.

  • Zachary Reyes