The Brent crude price witnessed a decline to $78 per barrel following the recent announcement by the Organization of Petroleum Exporting Countries (OPEC) regarding the postponement of the oil producers’ meeting originally scheduled for November 26. As of 3:40 PM, GMT+1, Brent crude stood at $78.86, marking a notable drop since late September 2023 when it was priced at $98 per barrel.
OPEC confirmed on Wednesday that the highly anticipated meeting would now convene on November 30, attributing the delay to ongoing discussions between Saudi Arabia and other producers who are falling short of expected production quotas.
Nigeria, facing the risk of producing only 1.38 million barrels per day of crude oil in 2024, failed to significantly increase its oil production level by the November 2023 deadline set by OPEC. In June 2023, sub-Saharan African OPEC members, including Nigeria, acknowledged the potential for reduced quotas in 2024 if increased production capacity was not demonstrated before November 2023.
Despite reaching a peak of 1,350,573 barrels per day in October 2023, Nigeria’s crude oil production fluctuated between 1 million and 1.34 million barrels per day throughout the year, considerably below the assigned quota of 1.78 million barrels per day for 2023.
The challenges facing Nigeria in boosting its oil production capacity include crude oil theft, which has adversely affected natural gas output, as confirmed by the Nigeria Liquefied Natural Gas (NLNG) Limited.
Goldman Sachs anticipates the possibility of a more significant cut in oil output during the upcoming OPEC meeting. There is a 35% chance, according to Goldman Sachs, that major OPEC producers, led by Saudi Arabia and Russia, might extend their voluntary production cuts until at least the first quarter of 2024. This move is seen as a hedge against the risk of Brent prices dropping below $80 per barrel, particularly due to anticipated weaker demand in the first quarter of 2024, as reported by Reuters.