•Brent crude stabilises at $78
Emmanuel Addeh in Abuja
The Organisation of Petroleum Exporting Countries (OPEC) has confirmed that Nigeria produced 171,000 barrels per day in November, still about 700,000 barrels per day less than its quota for the month.
Making the disclosure in its Monthly Oil Market Report (MOMR) for December, OPEC stated that considering direct oil production report from the country, Nigeria’s output increased by about 171,000 bpd last month to hit 1.186 million bpd.
The figure, the OPEC report indicated, were far less than what they were in 2020, regarded as the Covid-19 year, when Nigeria produced 1.493 million bpd and in 2021, when it averaged 1.323 million bpd. Nigeria’s OPEC quota has averaged 1.8 million bpd in the last couple of months.
However, the production began to slump markedly in the first quarter of 2022, the report stated, when Nigeria drilled 1.3 million bpd on the average, further reducing to 1.133 million barrels in the second quarter and falling substantially to 999,000 bpd in quarter three of this year.
Nigeria has blamed oil theft and pipeline vandalism for its inability to meet its production allocation for about a year.
In terms of the general outlook, OPEC stated that Nigeria’s economy expanded by 2.3 per cent y-o-y in 3Q22, decelerating from the growth of 3.5 per cent y-o-y in Q2, 2022.
The report explained that this marked the eighth consecutive quarter of growth, yet the slowest rate since the first quarter of 2021.
Moreover, it noted that economic conditions were challenged by the factors such as natural disasters that have hampered productivity in the country. Nigeria recently experienced massive flooding in at least one third of its states.
Stating that non-oil sector has been the key growth engine, OPEC stressed that this expanded at a slower pace of 4.3 per cent y-o-y in 3Q22 compared with 4.8 per cent in 2Q22.
“The inflation rate accelerated to its highest level in 17 years in October as localised food, and fuel shortages increased the headline inflation rate to 21.1 per cent y-o-y from 20.8 per cent y-o-y in September,” it added.
According to the report, OPEC oil production in November decreased by 744,000 barrels per day compared to October, which was 28.83 million barrels per day, with the members of the organisation fulfilling the oil agreement by 174 per cent.
“According to secondary sources, total OPEC-13 crude oil production averaged 28.83 million bpd in November 2022, lower by 744 bpd m-o-m.
“Crude oil output increased mainly in Nigeria and Angola, while production in Saudi Arabia, the UAE, Kuwait and Iraq declined,” the report said.
In the same vein, out of 13 OPEC countries which have obligations to limit production under the OPEC+ deal, and were supposed to reduce oil production by 1.273 million barrels per day from the level of August, the total production reduction in November was 2.211 million barrels per day.
Meanwhile oil rose by less than $1 in the afternoon session yesterday, as declining optimism over a Chinese oil demand recovery capped support from supply disruptions.
Brent crude futures were up 62 cents, or 0.79 per cent, to $78.61 per barrel by , while United States West Texas Intermediate (WTI) crude futures gained 34 cents, or 0.46 per cent, to $73.51.
Prices rose by over $1 per barrel earlier in the session but eased after Chinese leaders reportedly delayed a key economic policy meeting, amid surging COVID-19 infections, according to Reuters.
