Oil Prices Could Fall Soon’- Minister Of Petroleum Assures

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Oil Prices Could Fall Soon’- Minister Of Petroleum Assures

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said crude oil price may fall to $44 per barrel if the Organisation of Petroleum Exporting Countries fails to reach a consensus this week.

The Federal Government has proposed a crude oil benchmark price of $42.5 per barrel for the 2017 budget, compared to this year’s $38 per barrel.

Brent, against which Nigeria’s oil is priced, dropped to $47.12 per barrel on Friday from $49 per barrel on Thursday.

OPEC will meet on November 30 in Vienna, Austria, to assign output quotas after agreeing on a framework deal in September to tackle the supply glut in the global oil market.

“The challenge is less with OPEC and more with the outer forces we don’t control. The United States is beginning to ramp up volumes again,” Kachikwu told Bloomberg in an interview in Tokyo.

He said,

“My greater worry is less than OPEC’s ability to find unity in these issues, which I think we will; and more the fact of how much a decision that we make impacts on the pricing issues.”

Kachikwu said oil price might rise slightly above $50 per barrel if a consensus was reached, and could fall as low as $44 without a deal.

Oil prices fell more than two per cent on Friday, dragged down by uncertainty over whether OPEC would reach an output deal, after Saudi Arabia said it would not attend talks on Monday with non-OPEC producers to discuss supply cuts.