NIGERIA BOOSTS OPEC OIL PRODUCTION INCREASE

Nigeria accounted for two-thirds of the increase of the Organization of Petroleum Exporting Countries, OPEC, which boosted supplies by 120,000 barrels, bpd to 29.24 million barrels per day, MMbpd, as its output reached a one-year high, according to a Bloomberg survey.

Nigeria had revived production from record lows this year after the government reached a deal with security companies linked to Government Ekpemupolo, a onetime warlord in the oil-producing Niger River delta region. It pumped 1.44 MMbpd in February, the survey showed. The survey also stated that other OPEC members largely held output steady, as the group adhered to quotas fixed late last year to keep global crude markets in balance amid a fragile recovery in demand. Group leader Saudi Arabia has pledged that the targets will remain in place until the end of 2023.

Oil consumption is projected to climb and boost prices later this year as China’s economic reopening from anti-Covid lockdowns gathers pace. Yet concern over tightening U.S. monetary policy and the threat of recession is weighing on the market for the time being, instilling a sense of caution in Riyadh and its partners. At the same time, OPEC nations are said to be watching developments in Russia  part of a wider coalition known as OPEC+  which has threatened to cut production in March in retaliation for western sanctions over the war in Ukraine. Russian output has so far held steady in the first months of 2023 despite widespread condemnation over the conflict. Bloomberg’s survey is based on ship-tracking data, information from officials and estimates from consultants including Kpler Ltd., Rapidan Energy Group, and Rystad Energy. The OPEC+ coalition is next due to hold an online monitoring session to review market conditions early next month, and to have a full in-person meeting at its Vienna headquarters in June. 

It would be recalled that Nigeria’s oil production had risen month-on-month, MoM, by 1.9 per cent to 1.258 million barrels per day, mb/d, in January 2023, from 1.235 mb/d recorded in December 2022. The figures excluded Condensate.  The Organisation of Petroleum Exporting Countries, OPEC, in its February 2023 Monthly Oil Market Report, MOMR, obtained by Vanguard yesterday, however, indicated that on a year-on-year, YoY, basis, the January output was a massive 10 percent drop from the 1.399 mb/d in January 2022.

The report also showed that Nigeria, beat Angola that produced 1.050 mb/d to become Africa’s leading producer   while Equatorial Guinea came last with 55,000 barrels per day during the period. Nigeria’s oil output in January 2023 remained significantly short of the 1.8 million barrels per day allocated to the country by OPEC.