Nigeria backs Saudi Arabia's call to address the disconnect between paper and physical oil markets, Nigerian Minister of State for Petroleum Resources Timipre Sylva said Aug. 26.
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"A stable oil market benefits all -- consumers, producers and investors alike. It is also a catalyst for global economic growth. As such, any measure required to ensure the stability of the oil market, whenever it is necessary, will always be comprehensively supported by Nigeria," the junior minister said.
Several other OPEC+ countries have already expressed support for Saudi Arabian energy minister Prince Abdul-Aziz bin Salman, who said Aug. 22 that OPEC+ has the flexibility and commitment to cut crude output levels if needed in response to the price disconnect.
ICE Brent futures contract has seen an uptick since bin Salman's comments and was trading at $100.3/b as of 1:18 GMT Aug. 25. A US stock draw and reduced optimism about an Iran nuclear deal have also supported prices in recent days.
Prices remain below June levels, however, with the longer-term decline supported by signs of progress over an Iran deal and forecasts for a weakening global economic backdrop. The ICE front-month Brent contract settled at $99.34/b Aug. 25, down $1.88 on the day. It has fallen back from a recent high of $120.83/b on June 8.
Platts assessed physical Dated Brent at $100.04/b on Aug. 25, up from $98.89/b the day before but well off from a recent high of $132.06/b on June 14.
Platts Analytics said that bin Salman's comments signal a likely cut if the US reaches a nuclear deal with Iran that allows the latter to bring back significant crude exports.
"It also raises the odds that Q4 2022 OPEC output will fall from unsustainable September highs, with or without an official cut, and that quotas are likely to decrease from historically-elevated levels when the current deal is extended beyond its end-December expiration," Platts Analytics said in a political risk scorecard released Aug. 25.
The producer group posted its highest monthly crude oil production rise in five months in July, led by gains in Saudi Arabia and Kazakhstan, the latest Platts survey by S&P Global Commodity Insights showed.
Output grew by 490,000 b/d to 42.58 million b/d last month. This is still short of the 648,000 b/d promised when the group agreed to accelerate their quota increases for July and August to help meet rising demand. The gap between OPEC+ production and its quotas has grown to 2.80 million b/d.
OPEC+ member countries that have already backed the move include Venezuela, Azerbaijan, Congo and Libya. Other media have reported that the UAE, Sudan, Iraq, Algeria, Kazakhstan and Equatorial Guinea also support Saudi Arabia's position.
OPEC+ ministers will next meet Sept. 5 to decide on October production targets. The producer group posted its highest monthly crude oil production rise in five months in July, led by gains in Saudi Arabia and Kazakhstan, the latest Platts survey by S&P Global Commodity Insights showed.
OPEC+ agreed at its Aug. 3 meeting to raise September quotas by only 100,000 b/d over August, with officials citing concerns over coronavirus cases and other economic headwinds, along with an expected seasonal easing of demand.