Earlier on, 30 November 2016, members of the Organisation of Petroleum Exporting Countries - OPEC meet to agree on oil production cuts so as to beef up the lowly priced commodity. The OPEC members agreed to a production of 1.2 million barrels per day in January 2017; this will reduce the overall production to 32.5 million barrels per day.
Exempted from this production cuts are Nigeria and Libya, both are currently experiencing internal sabotage in production. Furthermore, Iraq has been assigned a production quota, the first ever since the Gulf War in 1990.
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| Brent Crude Oil - Light : courtesy of NASDAQ |
This has seen about 17% and 15% increase for Light and Heavy crude respectively. An eight dollar rise from $47 per barrel to $55 per barrel for Light Crude and a seven dollar rise from $45 per barrel to $52 per barrel.
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| WTI Crude Oil - Heavy oil : courtesy of NASDAQ |
Furthermore, in other to ensure effectiveness of the production cut on the oil price, the OPEC block will be meeting with non-OPEC members on 10 December 2017 to agree on further 600,000 barrels per day cut by the non-OPEC members; Russia has pledged to 300,000 barrels per day cuts in production.
What effect will this have on Nigeria's economy? Stay connected to Dreaming Nigeria blog for more information.
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