•OPEC raises oil demand forecast in Q1, 2022
Emmanuel Addeh in Abuja
Nigeria has regained its top position among crude oil producing countries in Africa with crude oil production averaging 1.27 million barrels per day in November, according to the latest monthly report from the Organisation of Petroleum Exporting Countries (OPEC).
The latest OPEC report indicated that Nigeria pumped an additional 47,000 barrels per day; compared to the 1.228 mb/d produced averagely in the month of October 2021.
Last month, Nigeria lost its top oil producer status in Africa to the North African country, as its crude oil production continued to fall mainly due to ageing upstream infrastructure.
In same month, Nigeria’s oil output fell to about 1.23 million barrels per day from about 1.25 million bpd the previous month, with Libya, which overtook Angola as the second-biggest producer on the continent in December last year, seeing its oil production rise to 1.24 million bpd.
According to the latest OPEC report, whereas Nigeria’s figure rose, Libya, which clinched the top spot in Africa in October with 1.24 mb/d declined to 1.211 mb/d in November.
“According to secondary sources, total OPEC-13 crude oil production averaged 27.72 mb/d in November 2021, higher by 0.29 mb/d month-on-month. Crude oil output increased mainly in Saudi Arabia, Iraq and Nigeria, while production in Angola, Libya and Congo declined,” the report stated.
But despite the rise, several countries, such as Angola and Nigeria, pumped well below their quotas, increasingly concentrating the group’s spare production capacity in Saudi Arabia, the UAE and Kuwait.
This was expected to create a supply squeeze towards the latter half of 2022, if demand returns to or surpasses pre-pandemic levels, as expected.
In addition, OPEC stated that the near term outlook of Nigeria economy was hindered by the elevated inflationary and labour market pressures, but noted that the improvement in oil prices still supported the economic recovery.
Meanwhile, OPEC has sharply raised its forecast for oil demand in the first quarter, narrowing a projected oversupply, as it expects the omicron variant to have a transitory impact on the global economy.
The oil cartel said it now sees the world consuming 99.13 million bpd of oil in the first three months of 2022, an increase of 1.1 million bpd from its forecast last month, when pessimism about the spread of omicron.
OPEC and its Russia-led allies decided at their December 2 meeting to stay the course with a 400,000 bpd production quota increase for January. Of that amount, about 253,000 bpd is allocated to OPEC’s 13 members.
“Improved COVID-19 management and rising vaccination rates (will enable) economic activity and mobility to return to pre-pandemic levels, supporting transportation fuels in particular. Meanwhile, as vaccination rates increase, the impact of the omicron variant is projected to be mild and short-lived,” it said.
For the full-year 2022, OPEC forecast global demand will average 100.79 million bpd, while 2021 demand will come in at 99.63 million bpd.
Both figures are about 200,000 bpd higher than in last month’s report, with the bulk of the upward revisions coming in Asia, leaving the year-on-year growth rate unchanged.
But the figures still suggested a surplus for early 2022, though smaller than before, with the call on OPEC crude pegged at 27.89 million bpd for the first quarter, rising to 28.31 million bpd in the second, 29.54 million bpd in the third and 29.58 million bpd in the fourth.
The report further kept its forecast for non-OPEC liquids supply growth this year largely unchanged at around 680,000 bpd, for an average 63.65mn bod, and still sees this growing by 3mn b/d next year.
