Nigeria joined fellow OPEC+ member Saudi Arabia in saying the group must resist pressure to raise oil production faster until the coronavirus pandemic abates.
The 23-nation cartel shouldn’t yet change its strategy of increasing daily crude output by 400,000 barrels a month, according to Minister of State for Petroleum Resources Timipre Sylva.
The Organization of Petroleum Exporting Countries and allies including Russia next meet on Nov. 4. With oil soaring around 65% this year to more than $80 a barrel, some major consumers have called on the group to ease supply cuts it began last year more quickly.
“We have to look at the situation closely before we take action,” Sylva said in an interview in the Saudi capital of Riyadh, where he attended a climate conference. “It’s still very fragile. We must be very cautious before we take the next move.”
Saudi Energy Minister Abdulaziz bin Salman said to Bloomberg on Saturday that oil producers shouldn’t take the rise in prices for granted because the virus could still hit demand.
Sylva’s comments came on the same day Chinese officials said they expected Covid-19 infections to increase.
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“We’ve seen the slow down in China,” Sylva said. “A lot of people are calling for more oil, but we’re looking at problems in some economies. We know that we haven’t completely opened up yet.”
Nigeria is among several OPEC+ members struggling to reach their output quotas, which is exacerbating the oil market’s tightness. The country is pumping roughly 1.4 million barrels a day of crude, said Sylva, below its target of 1.6 million.
Companies including Royal Dutch Shell Plc and Exxon Mobil Corp. are trying to fix technical problems that make it difficult for Nigeria to raise production rapidly after last year’s deep cuts, Sylva said.
“We shut down a lot of the wells,,” he said. “Now, if we want to bring the wells back on, we face a lot of technical issues.”
The government says it can boost production in the next two years to 3 million barrels a day. That’s in part because of new investment it expects from foreign companies following the recent adoption of a new petroleum law, which lowers taxes.