Crude oil prices, hovering around $55 a barrel since early December, will climb by about $10 in the coming months as OPEC-led measures to curb a glut take hold, Nigeria’s oil minister said.
“Ultimately, the effects over the next few months will get us to where we want to be, which is in the mid-$60s,” Minister of State for Petroleum Emmanuel Kachikwu said in a Bloomberg Television interview from Rome.
Oil surged at the end of November and in early December after the Organization of Petroleum Exporting Countries surprised the market with output cuts and enlisted the help of non-member suppliers to eliminate a surplus. While militant attacks on its energy infrastructure meant Nigeria itself was spared from having to pump less, OPEC could ask for its participation, Kachikwu said.
Nigeria is now seeking to boost production as it recovers from the attacks, which targeted pipelines and other infrastructure. The nation is now pumping about 1.5 million barrels a day and the government is improving its engagement with communities in the Niger Delta as it seeks to build on that increase, said Kachikwu, who’s in Italy meeting the nation’s energy minister as well as the chief executive officer of Eni SpA.
Once crude oil production returns to about 1.8 million barrels a day, “then we’ll begin to look at OPEC asking us to do some cuts,” he said.
Kachikwu said that while Nigeria “probably will struggle” to reach that output level, the country would eventually join the cuts if production rises high enough. “There’s a willingness of every OPEC member to contribute,” he said.
When oil prices reach the mid $60s a barrel, they will struggle to go higher, he said.
–With assistance from Laura Hurst.