(Sundiata Post) – Nigeria’s crude oil production has dropped by an average of 150,000 barrels per day in July, following disruption in the Trans -Niger pipeline coupled with an indication that US producers are adjusting their spending plans, the Organization of Petroleum Exporting Countries (OPEC) has said.
Disclosing this in its Monthly Report for August released on Thursday, OPEC explained that weakness in the United States currency, which is the benchmark for the product, might have affected the global market.
Accordingly, the 14 oil cartel output jumped by 173,000 barrel a day to nearly 32.9 million barrels in July up from 32.69mbd in June, the highest level since the month (December) when the cartel began enforcing an agreement to limit its output in a bid to rebalance the market after three years of oversupply.
“Crude oil output increased mostly in Libya and Saudi Arabia, but price support has come from a fall in Nigerian production of 150bpd after a disruption in the Trans- Niger pipeline and indications that some US producers are adjusting their spending plans.
“July saw some additional weakness in the US dollar, on-going strengthening in refining margins and improved perceptions of solid end-user demand, as well as encouraging economic indications regarding China via rising copper prices”, OPEC said.
Nigeria’s oil production however, led the pack in Africa, at a production capacity of 1.748 million barrels per day, according to the report.
Giving a highlight on Nigeria and Libya, the OPEC monthly report explained that Nigeria lifted daily production by about 34,000 barrels, reaching about 1.75 million barrels a day while Libya daily output rose above 1 million barrels last month, up more than 150,000 barrels a day.
Recall that the Nigerian National Petroleum Corporation had said the country’s production limit has hit 2milion barrel a day last month.
On Saudi Arabia, the oil cartel top producer and de-facto, OPEC noted that it pumped above the limit it agreed to last winter, producing 10.07 million barrels a day.
“The kingdom has cut production well below its quota throughout much of the year, helping to offset weak compliance from other members. The rise is likely due in part to seasonal factors, as the Saudis burn crude to meet higher electricity demand in the summer” OPEC added.
According to the report, OPEC believes interest rates in developed nations will rise gradually from current low levels, supporting borrowing and economic growth in developing countries, adding that the cartel also sees a reduction in geopolitical tensions in some pockets of the world boosting growth.
“The world’s appetite for oil will reach 96.5 million barrels a day this year and 97.8 million barrels a day in 2018. Taken together, this will allow the global economy to enter the coming year with a firm basis to support better-than-projected growth in 2018,” OPEC revealed in its report.
Furthermore, on Nigeria economy, OPEC said Stanbic IBTC production managers index (PMI) grew at its fastest pace in two years, signalling expansions in the economy.
“The index jumped to 54.8 in July, from 52.9 in June because of fast pace of expansion in both output and new orders despite some decrease in for-export orders and in a positive note, the country’s private sector registered fastest pace of growth in two years in July as suggested by the Stanbic IBTC Bank Nigeria PMI,” OPEC said.
Quoting the National Bureau of Statistics, OPEC said the deceleration in GDP notably slowed from 1.6% y-o-y in 4Q16, to 0.6% in 1Q17, adding that inflation somewhat eased to 16.1% y-o-y in June, from 16.3% in the previous month.
Meanwhile, some oil producers from OPEC and its allies met in Abu Dhabi on Tuesday, and decision from the meeting after the talks was that they remain steadfast in their commitment to fulfil the November deal.
Oil prices, however have not been able to push up durably from mid-$55 a barrel despite OPEC and other producers agreement in May to extend production cuts, into 2018 in order to ease a global supply glut and support the price of crude.
OPEC has also boosted estimates of demand for its crude for 2017 and 2018 amid stronger-than-expected fuel consumption and a weaker outlook for rival supply by 200,000 barrels a day for each year.