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Brent Crude Hits $72.98pb As Nigeria Eyes Supply Cut

Oil prices appreciated as much as one per cent yesterday after Saudi Energy Minister Khalid al-Falih indicated there was consensus among OPEC and allied oil producers to continue limiting supplies.

Also, Nigeria’s oil minister said he hoped the supply cut agreement between OPEC and non-OPEC members would be extended until year-end.

“I’m hoping so,” Emmanuel Ibe Kachikwu said when asked if the deal needs to be extended. “I’m not so much worried about wars. I don’t think that will happen. I don’t think anybody’s going to push to the point of war,” Kachikwu said when asked about a risk of war in the region.

Brent crude futures were at $72.98 a barrel, up 77 cents, or 1.1 per cent from their last close. Brent closed down 0.6 per cent on Friday. Also, the U.S. West Texas Intermediate, WTI, crude futures were at $63.39 per barrel, up 63 cents, or 1 per cent from their previous settlement. WTI closed down 0.2 per cent in the previous session.

The rally came after Falih said on Sunday there was a consensus among Organization of the Petroleum Exporting Countries and other non-OPEC producers to drive down crude inventories “gently”, but his country would remain responsive to the needs of what he called a fragile market.

“This second half, our preference is to maintain production management to keep inventories on their way declining gradually, softly but certainly declining towards normal levels,” he told a news conference after a ministerial panel meeting.

The OPEC, Russia and other non-member producers, an alliance known as OPEC+, agreed to reduce output by 1.2 million barrels per day from January 1 for six months, a deal designed to stop inventories building up and prices weakening.