Crude oil price seems to be settling at below $44 per barrel as expected recovery in the new week failed to happen after a consistent drop in the past two weeks to $43.14 average in early week trades. It tumbled from $45 a fortnight ago.
The new low price recorded, yesterday, was attributed to the sustained excess supply and weak demand, as well as speculation that the Organisation of Petroleum Exporting Countries, (OPEC), was opposed to effecting deeper output cut.
OPEC disclosed that the price of its basket of 14 crudes, including Nigeria’s Bonny Light stood at $43.14 a barrel on Monday, compared with $43.02 the previous Friday, according to OPEC Secretariat calculations. The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
The price of Brent and WTI also stood at $46.86 and $ 44.32 per barrel in the volatile market. A source in OPEC, who preferred not to be named, disclosed that the organisation will not rush into making a further cut in oil output. According to him, OPEC is not a cartel, meaning that its decision alone would not make much impact on the market.
He said that the cooperation of many stakeholders, especially oil producers and as well as situations in other international economic variables are needed to make positive impact on the market. Dr. Mohammad Sanusi Barkindo, OPEC Secretary General, stressed the importance of dialogue as an instrument to stabilising the global market.
He stated that in the OPEC and non-OPEC ministers have underscored the importance of enhancing dialogue and cooperation through the establishment of regular technical expert meetings.
Barkindo indicated that the first such meeting was held on May 19, 2017 at the OPEC Secretariat with the objective to strengthen and institutionalize joint cooperation at both the technical and ministerial levels.
He noted that the first session was dedicated to the developments in the US tight oil industry with in-depth briefings by international industry experts. In the closed session, the OPEC Secretariat gave presentations on the latest short and medium-term oil market developments, which were followed by discussions among the participating delegates.
Barkindo stated that the success of this meeting has paved the way towards a new framework for permanent and long-standing cooperation among oil producing countries, including the regular practice of joint research activities.