…As oil production rises to 1.35million bpd in August – OPEC
By Charles Ebi
Nigerian crude oil is traded at $75 per barrel according to latest media reports highlighting that the country’s benchmark crude traded below $70 per barrel while its oil output remains fragile.
Nigeria’s oil blends, known as light-sweet crude oil blends because of their low sulfur content and predominance of light oil grade, are still preferred by oil traders.
This preference is evidenced by the country’s oil blends—Brass River, Bonny Light, and Qua Iboe—trading above $74.50 per barrel, higher than the current Brent contract.
The country’s oil production remains lukewarm, adding significant economic pressure on West Africa’s largest economy. According to the Organization of the Petroleum Exporting Countries’, OPEC, September Monthly Oil Market Report, Nigeria’s crude oil production increased from 1.307 million barrels per day in July to 1.352 million barrels per day in August.
OPEC reported a slight increase in average daily crude production of 45,000 barrels per day based on data from the Federal Government. This report contradicts assertions made by the Federal Government that daily oil production was close to 1.6 million barrels per day.
Nigeria’s oil production decreased to 1.25 million barrels per day in May, despite the Nigerian National Petroleum Company Limited maintaining that the country’s oil production was almost at 1.7 million barrels per day. According to OPEC figures, Nigeria dropped 30,000 barrels per day, with its crude output falling from 1.28 million barrels per day in April to 1.25 million barrels per day in May.
Oil prices rose by more than 1% yesterday, offsetting some of the losses from the previous day, as worries about Hurricane Francine affecting output in the world’s largest producer—the United States—outweighed concerns about weakening global demand. At 0704 GMT, Brent crude futures had increased by 84 cents, or 1.2%, to $70.03 per barrel, while U.S. crude futures increased by 81 cents, or 1.2%, to $66.56 per barrel.
On Tuesday, both benchmarks saw an almost $3 decline, as OPEC revised its demand projections for this year and 2025, with Brent reaching its lowest point since December 2021 and WTI reaching a May 2023 low. OPEC’s latest monthly report indicated a lowered prediction for global oil demand growth to 2.03 million barrels per day (bpd) in 2024 from 2.11 million bpd last month. OPEC also reduced its forecast for global demand growth in 2025 from 1.78 million barrels per day to 1.74 million barrels per day.
Nevertheless, the Energy Information Administration ,EIA, highlighted that U.S. output growth will be lower than anticipated this year, even though global oil demand is expected to reach a new high. The week ending September 6 saw a decrease in U.S. crude oil stockpiles of 2.793 million barrels, while the number of barrels of gasoline in stock dropped by 513,000, according to market sources citing data from the American Petroleum Institute on Tuesday
China’s daily crude oil imports set a new high last month, but they are still 7% less than a year earlier and 3% less than the same period last year, according to Customs data and records obtained by Reuters on Tuesday.
Meanwhile, Nigeria’s average daily crude oil production rose by 3.4% to 1.352 million barrels in August according to the latest data published by OPEC.
The Organisation of Petroleum Exporting Countries ,OPEC, in its monthly oil market report for August reports that Nigeria’s crude oil production increased by 45 thousand barrels from 1.307 million barrels in July daily to the current figure.
The figure above is based on direct communication with Nigerian authorities on crude oil production for the month.
According to secondary sources, Nigeria’s average crude oil production in August stood at 1.448 million barrels per day- an increase of 57 thousand daily when compared to 1.391 million daily posted in the previous month.
Nigeria maintained its position as Africa’s largest oil producer by a wider margin, as Libya, its closest competitor, faced production challenges due to the shutdown of major oil fields during the month.
The report indicates that the oil cartel has revised its forecast for global oil demand growth in 2024 to 2.03 million barrels per day (bpd), down from the earlier projection of 2.11 million bpd.
It also lowered its 2025 global demand growth estimate to 1.74 million bpd from 1.78 million bpd.
In August, oil prices declined across the board, as reflected in the OPEC Reference Basket ,ORB, which dropped by $6.02, or 7.1%, to an average of $78.41 per barrel. The ICE Brent front-month contract fell by $5.00, or 6.0%, to $78.88 per barrel.
Similarly, the NYMEX WTI front-month contract decreased by $5.05, or 6.3%, averaging $75.43 per barrel, while the DME Oman front-month contract declined by $5.83, or 7.0%, settling at $77.54 per barrel.
The front-month ICE Brent/NYMEX WTI spread widened by 5¢ to $3.45 per barrel.
Oil supply from non-OPEC+ countries is projected to grow by 1.2 mb/d in 2024, consistent with last month’s assessment.
The primary drivers of this growth are expected to be the US, Canada, and Brazil. The forecast for non-OPEC+ liquids supply growth in 2025 remains unchanged at 1.1 mb/d, with the US, Brazil, Canada, and Norway leading the increase.
Natural gas liquids ,NGLs, and non-conventional liquids from countries participating in the Declaration of Cooperation ,DoC, are expected to grow by approximately 0.1 mb/d, reaching an average of 8.3 mb/d in 2024, followed by an increase of around 60 tb/d to 8.4 mb/d in 2025.
In August, crude oil production from countries involved in the DoC fell by 304 tb/d compared to the previous month, averaging around 40.66 mb/d, according to available secondary sources.
