EMEA News
Nigeria Offers Vague Support for Oil Cutback Extension as Saudis State More Work is Needed
Emmanuel Ibe Kachikwu, oil minister for Nigeria, generated what critics could well argue is fake news on Monday by stating that his country supports the Organization of the Petroleum Exporting Countries (OPEC) extending its crude production cutbacks beyond their March expiry and through to the end of 2018, "as long as the right terms are on the table."
In acknowledging the growing agreement among other OPEC members to keep the deal alive for another year, Kachikwu remarked, "There isn't any reason to change what is a winning formula.....there is a consensus to extend; the issue will be the duration."
Left unsaid was whether "support" means Nigeria, which is exempt from the deal, would actually participate in the cutbacks.
However, vague declarations and rhetoric are the hallmarks of OPEC and its members in advance of their formal meetings (the next one is later this month in Vienna); as such, Khalid al-Falih, oil minister for Saudi Arabia, put in his two cents' worth after meeting with his Russian, Uzbek, and Kazakh counterparts and stating, "There is a general satisfaction with the strategy of 24 countries that signed a declaration of cooperation.
"Everybody recognizes that (the) job is not done yet by any means we still have significant amount of work to do to bring inventories down; mission is not yet complete, more needs to be done."
Meanwhile, even though the Saudis' detainment Monday of the kingdom's most prominent business people, officials, and princes as part of a corruption probe caused traders to push crude beyond a two year high, experts such as Giovanni Staunovo, commodity analyst at UBS Wealth Management, believe it is unlikely there would be any change in oil policy ahead of the Vienna meeting.
Bob McNally, an energy consultant who was an adviser to U.S. president George W Bush, agrees: "The Saudi course on oil policy is set - extend and tighten [supply cuts] until excess stocks drain - and should not be disturbed by these events.
"Grimly facing another year at least of oil policy risk and potential turbulence, it makes sense to batten down the hatches."
While support for OPEC's extension appears to have reached fever pitch, the sole voice of restraint is Alexander Novak, energy minister for Russia, who last week warned that an extension may be discussed later this month but a decision would not necessarily be taken.
