The Organisation of Petroleum Exporting Countries (OPEC) yesterday confirmed that Nigeria’s oil output grew by a meagre 23,000 barrels per day in January, a significant decrease from the December 2022 production increase of about 55,000 bpd.
The international oil cartel which stated this in its February Monthly Oil Market Report (MOMR), noted that Nigeria’s drilled 1.235 bpd in the first month of the year, while it succeeded in raising production to 1.258 million bpd in January, according to self-reported data.
But it stated that if secondary sources were considered, production in Nigeria increased by 65,000 bpd in the month under reference, with 1.33 million bpd output compared to 1.27 million bpd the previous month.
OPEC gets its production figures mainly from two sources, either as reported directly by member countries or by information released by secondary energy intelligence platforms.
In general, crude oil production from all 13 OPEC members slid by 49,000 bpd in January from December as top producer Saudi Arabia slashed output by 156,000 bpd from the last month of last year to average 28.88 million bpd.
Saudi Arabia, the biggest producer and de facto leader of the cartel, pumped 10.319 million bpd in January, down by 156,000 bpd month on month, and more than 100,000 bpd below its quota of 10.478 million bpd.
This was despite the OPEC+ agreement, set out at the October meeting and valid from November 2022 through December 2023, or until OPEC+ decides otherwise.
A Bloomberg survey found earlier this month that OPEC’s crude oil production fell in January due to cuts by Saudi Arabia which may have been steeper than the Kingdom’s quota.
Saudi Arabia, however, self-reported to OPEC that its crude oil production averaged 10.453 million bpd in January, up by 17,000 bpd from December.
According to OPEC’s secondary sources, Nigeria and Angola boosted their production the most, by 65,000 bpd and 47,000 bpd, respectively. But these producers were among the biggest laggards in their OPEC+ targets as they continued to pump well below their quotas.
The 10 OPEC members that are part of the OPEC+ collective target production were estimated to have produced around 920,000 bpd below the January target, per a Reuters survey earlier.
But going forward, OPEC and OPEC+ do not plan to change the course in oil production targets after Russia announced last week a 500,000 bpd cut in its output for March.
On the Nigerian economy, OPEC stated that following a Gross Domestic Product (GDP) growth of 2.4 per cent y-o-y in 3Q22, 4Q22 data indicated that Nigeria’s economy faced a sharp rise in inflation, accompanied by higher interest rates and slowing private-sector momentum, leading to a slowdown in household consumption.
“ The inflation rate remained almost unchanged at 21.3 per cent y-o-y, after it had accelerated to its highest level in 17 years in December, reaching 21.5 per cent y-o-y. This has been driven by localised food and fuel shortages. The rate showed a constantly rising trend for most of the year,” OPEC added.
Meanwhile, oil prices fell yesterday after the United States government said it would release more crude from its Strategic Petroleum Reserve (SPR) as mandated by lawmakers, defying expectations from some traders that the release could be cancelled or delayed.
Brent crude futures, Nigeria’s oil benchmark, fell by 70 cents, or 0.81 per cent, to $85.91 per barrel at some point, while US crude futures fell by 93 cents, or 1.16 per cent, to $79.21 per barrel.
The US Department of Energy (DOE) said after the previous session ended that it would sell 26 million barrels of oil from the SPR, a release that would likely push the reserve to its lowest level since 1983, Reuters reported.
The US had considered cancelling the fiscal year 2023 sale after President Joe Biden’s administration last year sold a record 180 million barrels from the reserve. But that would have required Congress to act to change the mandate.
Supply concerns also eased after the Energy Information Administration (EIA) said it expected record March production from the seven biggest US shale basins.