•Again, oil producers’ group cuts demand for 2025
CHIGOZIE AMADI
Nigeria’s crude oil production recorded an improvement in November, with the country just less than 1 per cent away from meeting its Organisation of Petroleum Exporting Countries (OPEC) output of 1.5 million barrels per day.
Latest data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which aligned with information gleaned from OPEC’s Monthly Oil Market Report (MOMR) yesterday, indicated that last month Nigeria produced 1.485 million bpd.
It was, on the average, Nigeria’s highest volume of crude oil, excluding condensates drilled so far this year. In January this year, which hitherto had the highest crude oil production, Nigeria’s oil output was 1.42 million bpd.
In February, Nigeria recorded 1.32 million bpd; 1.23 million bpd in March; 1.28 million bpd in April; 1.25 million bpd in May and 1.27 million bpd in June.
Besides, in July, the country’s OPEC oil production was 1.3 million bpd; in August, it was 1.35 million bpd; 1.32 million bpd in September; 1.33 million bpd in October and then 1.48 million bpd in November.
Since about Q2 of 2020, Nigeria has not met its OPEC oil quota, a challenge it blamed on massive oil theft in the Niger Delta, waning investment in the sector, outright sabotage as well as deteriorating infrastructure.
The country’s persistent failure to meet its OPEC oil production allocation forced the global oil producers’ group to gradually slash Nigeria’s quota from about 1.8 million bpd previously.
But for the month of November, when condensates which are outside OPEC computation are added, Nigeria’s oil production, rose by almost 10 per cent to 1.69 million bpd, up from 1.538 million bpd recorded in October.
Although a huge improvement, it was still a shortfall compared to the 1.78 million bpd crude oil production budget benchmark for the outgoing year.
Also, condensates production declined slightly from 204,828 bpd in November from 204,806 bpd in October.
Also, yesterday OPEC cut oil demand growth forecasts for this year and next for a fifth straight month, making its deepest reduction to the 2024 outlook so far after agreeing to extend its supply curbs.
It chopped projections for consumption growth in 2024 by 210,000 barrels a day to 1.6 million barrels a day, according to the monthly report. It has slashed projections by 27 per cent since July as it belatedly recognised the deteriorating market picture.
Last week, the OPEC+ alliance led by Saudi Arabia and Russia agreed for a third time to delay plans to restart halted crude production, while also slowing the pace of increases once they do begin next year. The first in a scheduled series of hikes was postponed to April from January.
Oil prices have declined 17 per cent since early July as China falters and supply from OPEC’s rivals in the Americas booms. Brent futures are trading near $73 a barrel, too low for many countries in the coalition to cover government spending.
OPEC’s Vienna-based secretariat said the revision takes “into account recently received bearish data” for the third quarter,” including “downward revisions to OECD Americas and OECD Asia Pacific.”
Despite the slew of downgrades, OPEC’s forecasts remain significantly higher than most others in the oil industry, and at odds with actual data for consumption this year, a Bloomberg report said.
The alliance’s growth projections for 2024 are roughly double those of Morgan Stanley and Goldman Sachs Group Inc., and considerably above the International Energy Agency in Paris.
They’re even significantly higher than estimates from Saudi Arabia’s state oil company, Aramco.
OPEC predicts that oil consumption will average 103.82 million barrels a day this year. It lowered growth estimates for 2025 by 90,000 barrels a day to 1.4 million barrels a day.
The failure to accurately estimate oil demand this year casts further doubt on OPEC’s long-term expectation that oil consumption will keep growing to the middle of the century — a minority view even within the petroleum industry.
OPEC+ has been withholding output since 2022 in a bid to stave off a surplus and shore up prices.
With last week’s decision, its plan is now to revive 2.2 million barrels a day of halted output in modest slivers between April and late 2026.
