Mele Kyari, group general manager, crude oil marketing division, Nigerian National Petroleum Corporation (NNPC), says efforts being made by the Organisation of Petroleum Exporting Countries (OPEC) to re-balance the oil market is limited.
Speaking on Wednesday during the launch of the Egina crude grade at the Asia Pacific Petroleum Conference (APPEC) in Singapore, Kyari said OPEC’s effort is limited by its spare capacity.
According to the Energy Information Administration (EIA), spare capacity is the volume of production that can be brought on within 30 days and sustained for at least 90 days to manage the market.
The oil cartel’s spare capacity is currently found in Saudi Arabia, the UAE, Kuwait, and Russia.
“It’s obvious that if you have high prices it’ll affect demand, so you have to do some market balance,” he told Reuters
“OPEC will do everything to stabilise, to balance the market but I’m sure you’re also aware that there’s a limit to what they can do. You must have the spare capacity.”
Kyari said Nigeria plans to increase its crude output by 100,000 barrels per day (bpd) by the end of 2018 with production at the Egina ultra-deepwater field.
The oil field is projected to raise Nigeria’s crude oil production by 200,000bpd, approximately 10% of the country’s total oil output.
Brent crude futures, the global oil benchmark has topped the $80 dollar mark since Monday, climbing to $82.18 barrel per litre.