Oil prices witnessed a sharp fall on Monday after members and allies of the Organisation of Petroleum Exporting Countries agreed to boost output.
Brent, the crude against which Nigeria’s oil is priced, fell by $1.2 per barrel to $72.39 per barrel as of 8.36am Nigerian time on Monday, industry figures showed.
OPEC and its allies earlier agreed on Sunday to increase crude oil production by 400,000 barrels per day.
The organisation made this known in its Declaration of Cooperation resolutions reached at the 19th OPEC and Non-OPEC Ministerial Meeting held virtually.
The participating countries had after the virtual meeting agreed on several issues which includes the decision “to adjust upward their overall production by 0.4mb/d (million barrel per day) on a monthly basis starting August 2021 up until phasing out the 5.8mbd production adjustment.
“And in December 2021 (they will) assess market developments and participating countries’ performance.”
The organisation said it would continue to adhere to the mechanism to hold monthly OPEC and non-OPEC Ministerial Meetings for the entire duration of the Declaration of Cooperation.
It said this was necessary to assess market conditions and decide on production level adjustments for the following month, endeavouring to end the production adjustment by the end of September 2022 subject to market conditions.
It also said that the body would adjust, effective May 1, 2022, the baseline for the calculations of the production adjustments.
The organisation reiterated the critical importance of adhering to full conformity and taking advantage of the extension of the compensation period until the end of September 2021.
It said compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.
The meeting decided to hold the 20th OPEC and non-OPEC Ministerial Meeting on 1 September 2021.