The international oil benchmark, Brent crude, plunged to $62 per barrel on Tuesday despite a nine-month extension of production cuts by the Organisation of Petroleum Exporting Countries and its allies.
Bloomberg reported that oil had its worst reaction to an OPEC meeting in more than four years, with prices sliding just after the cartel agreed to prolong production curbs as fears about the global economy mount.
Brent, against which Nigeria’s crude oil is priced, fell by $2.52 to $62.54 as of 9.20pm Nigerian time. The drop in crude prices on Tuesday was an “anomaly,” OPEC Secretary-General, Mohammad Barkindo, told reporters in Vienna, according to Bloomberg. The 6th OPEC and non-OPEC ministerial meeting in Vienna, Austria, on Tuesday, focused their deliberations on recent oil market developments and the immediate prospects, according to a statement.
The group said, “In view of the underlying large uncertainties and its potential implications on the global oil market, the 6th OPEC and non-OPEC ministerial meeting hereby decided to extend the decision taken on voluntary production adjustments at the 5th OPEC and non-OPEC ministerial meeting on December 7, 2018, for an additional period of nine months from July 1, 2019 to March 31, 2020.
“The Joint Ministerial Monitoring Committee was requested to vigilantly monitor the fair implementation of the above mentioned resolution, in light of the supply and demand balance and the prevailing uncertainties, and report back to the meeting.”
The meeting emphasised the support and commitment of all participating countries in the declaration of cooperation to build on the success achieved thus far, and thus endorsed the draft text of the Charter of Cooperation, a high-level voluntary commitment, to enable the continued proactive dialogue between countries in the Declaration of Cooperation at both ministerial and technical levels. The meeting decided that the next OPEC and non-OPEC ministerial meeting would convene in Vienna, Austria, on December 6, 2019.