By Patrick Andrew
Abuja
The federal government expressed optimism that oil prices will hit the $60 mark as the year finally comes to an end.
This optimism follows last weekend’s landmark global pact between some member nations of the Organisation of Petroleum Exporting Countries (OPEC) and 11 non-oil producing members who agreed to cut oil production to halt glut and boost prices of their products.
Minister of Petroleum Resources, Dr. Emmanuel Kachukwu said following the signed agreement that OPEC expects not only stability in production but sharp reduction in the quantity of the products available to ensure there was no glut.
According to the minister, excess production both by member states and non-OPEC members alike has had significant adverse effect on the prices of oil in the international market in recent times and they are determined to reverse the trend.
Kachukwu said the sad effect of the glut and lack of proper control of the production and supply of the products had resulted to sharp drop in the prices oil as well as hurt the revenues of oil producing states globally.
Further, he said the after effect has hurt all producers, who, he said, are now poised to face the problem head-long by cutting down on excess production.
In Saturday’s agreement, the 11 non-OPEC members said they have accepted to cut production by 558,000 barrels per day, a mere 48,000 barrels short of the 600,000 that OPEC had initially targeted, when it decided to reach out to them to negotiate reduction in production.
“I think this deal is different from previous arrangements. This time there is a major consensus. Everybody realises that one needs to cooperate to cut down on production and stabilise prices for our collective good.
“Both the OPEC and non-OPEC groups understand that both sides would have to keep to the deal otherwise it falters so I think the urgency of now and the criticality of the economy they have to protect is enough incentive for everybody to align this time,” he said.