Nigeria Hopeful of Oil Freeze

Nigeria Hopeful of Oil Freeze

Despite recent disagreements among OPEC members, Nigerian Oil Minister Emmanuel Ibe Kachikwu told CNBC that the Organization of Petroleum Exporting Countries will be able to come together in an agreement to freeze oil production as a way to combat low oil prices.
"The energy minister of Qatar and the president of OPEC are leading that pact and there is a lot of conversation going on and there's a lot of consensus building on the issue of the freeze," Kachikwu said in an exclusive interview with CNBC.
"Saudi Arabia and Russia are aligned on the issue of a freeze, so I think the chances are very high," Kachikwu added.
Speculation over OPEC's intentions has been running at a fever pitch, and whipsawed the price of crude. To date, Ali al-Naimi, Saudi Arabia's oil minister, has voiced strong resistance when it comes to a production cut, but has indicated an openness to a freeze.
"Freeze is the beginning of a process and that means if we can get all the major producers to agree not to add additional balance, then this high inventory we have now will probably decline in due time. It's going to take time," Naimi said at the annual IHS CERAWeek energy conference in Houston last week.
"It is not like cutting production. That is not going to happen because not many countries are going to deliver even if they say they will cut production. They will not deliver. So there is no sense in wasting our time seeking production cuts."
Kachikwu believes movements toward a freeze represent a big step in the right direction and told CNBC he remains confident in his plan to work with OPEC members.
"I am certainly hoping for prices in the range of $45 to $50 [per barrel]," the minister said.
"I'm hoping a consensus can be built and that parties can begin to work together across the board, not just OPEC members, but also non-OPEC members, which is what the Persian Gulf states and most of us have pushed for," he said. With that, "you'll begin to see movement upward in those prices."
US crude ended the week up 10.59% for its best week since August 28, 2015, when it gained 11.79%. Brent ended the week up 6.33%.


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