Will OPEC+ stick with supply plan next week?
Oil traders expect OPEC+ to stick with its current supply plan at a review meeting next week despite pressure from U.S. President Donald Trump to bring down crude prices. Meanwhile, investors await Trump's move on Mexico, Canada tariffs. Chinnan Dikwal, Vice Chair at the African Energy Council joins CNBC Africa for more on the impact of this move and other developments in the local market.
Thu, 30 Jan 2025 11:59:33 GMT
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AI Generated Summary
- OPEC plus is likely to maintain its current supply plan despite pressure from Donald Trump, with implications for oil prices in the medium term.
- Nigeria's oil production has surged by 30% over the past two years, reaching 1.49 million barrels, leading to discussions with OPEC on securing a higher quota.
- Investor confidence in Nigeria's oil sector is growing, exemplified by Sustainable Capital's stake acquisition in Seplat Energy, signaling positive prospects for the industry.
Oil traders are anticipating that OPEC plus will maintain its current supply plan at the upcoming review meeting despite U.S. President Donald Trump's push to lower crude oil prices. Investors are also eagerly awaiting Trump's decision on potential tariffs on Mexico and Canada. Chinnan Dikwal, Vice Chair of the African Energy Council, shared insights on the potential impact of these developments on the local market. The upcoming OPEC plus meeting, scheduled for the 3rd of February, will be closely watched as it marks the first gathering of ministers under the new administration of Donald Trump. Trump's vocal stance on high oil prices and his desire for lower prices, including direct comments to Saudi Arabia, are expected to dominate the discussions. While there are speculations on whether OPEC plus will increase production to lower prices, current indications suggest that they will maintain their position until at least April of this year. However, concerns linger on whether Trump's influence could eventually bear down on oil prices in the medium term. Dikwal pointed out that Trump's 'drill baby drill' approach could result in opening up new drilling areas, potentially flooding the market with up to three million barrels of crude, leading to an oversupply that may cap oil prices at an average of $60-65 per barrel for the year. Nigeria's oil ambitions have been steadily on the rise, with production increasing by 30% over the past two years, reaching 1.49 million barrels. This growth can be attributed to efforts to combat oil theft, such as monitoring pipelines to minimize theft. Nigeria now aims to secure a higher quota from OPEC to match its increased production. The increasing interest from investors, such as Sustainable Capital's acquisition of a stake in Seplat Energy, signals a vote of confidence in Nigeria's oil sector. Seplat's plans to double its production to 120,000 barrels per day indicate promising prospects for the industry, attracting new investments and driving further growth in the sector.
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