Oil

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Royal Dutch Shell has rejected the Nigerian government's claim of fraud and corruption. The African nation has today filed a $1.1bn legal claim in London against the company, and also Italy's ENI, about an oil block call OPL 245.

Shell says in a statement: “We maintain that the 2011 settlement of long-standing legal disputes related to OPL 245 was a fully legal transaction with Eni and the Federal Government of Nigeria, represented by the most senior officials of the relevant ministries.

"Since this matter is before the Tribunal of Milan, it would not be appropriate for us to comment in detail on the new claims that have been made by the Federal Republic of Nigeria. However, based on our review of the Prosecutor of Milan's file and all of the information and facts available to us, we do not believe that there is a case to answer in this matter.”

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Italian energy giant Eni has rejected claims of fraud and corruption by the Nigerian government.

Earlier today, Nigeria filed a $1.1bn claim in London against Eni and Royal Dutch Shell over an oilfield licence called OPL 245.

Eni said it rejected "any allegation of impropriety or irregularity in connection with this transaction".

The company "signed a commercial agreement in 2011 for a new licence for OPL 245 with the Federal Government of Nigeria and the Nigerian National Petroleum Company and the consideration for the license was paid directly to the Nigerian government," it said.

Oil prices are still in positive territory following that production cut deal agreed between OPEC and its allies.

Brent crude is up 4.5% at $62.96 a barrel while West Texas Intermediate is ahead 4.12% at $53.60.

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There has been mainly favourable reaction to an oil production cut agreed by OPEC and its allies, including Russia.

So far there has been no word (or tweets) from US President Donald Trump who has been calling for Saudi Arabia, the largest member of OPEC, to keep a lid on oil prices.

However, Ann-Louise Hittle, vice president of macro oils at Wood Mackenzie, says: "The decision is likely to be met with support from some US producers who were concerned that without a deal, West Texas Intermediate prices would fall further, possibly curtailing 2019 drilling activity."

She adds that the 1.2 million barrels per day cut in daily oil output would cause Brent crude to rise back above $70.

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Following a meeting at OPEC's headquarters in Vienna, the group says that “in view of the current fundamentals and the consensus view of a growing imbalance in 2019" it will reduce output by 800,000 barrels per day (bpd) from January.

The reduction will be for an initial period of six months, which will include a review in April.

Russia and other non-OPEC nations will also cut 400,000 bpd

OPEC members Iran, Venezuela and Libya are exempt from the cut.

Saudi Arabia, which is the largest member of OPEC, said it will reduce output to 10.2 million bpd in December from 10.7 million bpd in December.

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Oil traders will be keeping an eye on events in Vienna today, where members of the oil producers club, Opec, are in the second and final day of talks.

On Thursday it seemed that the oil cartel had agreed to cut production, but reports today say that Iran is looking for an exemption from any production cuts.

Also Russia, which is not in Opec, has yet to commit to any cut in production, which would help drive up prices.

There might be more clarity this afternoon when Opec meeting non-Opec oil producers.

North Sea Brent Crude is trading 15 cents a barrel lower at $59.91 a barrel.

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Meanwhile, US crude prices remain down for the day.

West Texas Intermediate is off 2.15% at $51.53 a barrel. Brent crude is 2.23% lower at $60.14.

Prices are expected to volatile on Friday when OPEC holds a meeting with non-members, including Russia, in Vienna to potentially agree a production cut.