Although it undershot the 1.701 million bpd Organisation of Petroleum Exporting Countries (OPEC) output cut in January 2022, Nigeria was able to ramp up production to the tune of 202,000 bpd for the month.
According to the OPEC’s Monthly Oil Market Report (MOMR) for January released yesterday, the country struggled to pump 1.399 million bpd out of the total allocation, quoting primary sources.
This was in contrast to December 2021, when it pumped 1.197 million barrels per day and November when it was only able to produce 1.275 million bpd.
The latest data by OPEC indicated that all 13 members of the group—including the three producers exempted from the OPEC+ quotas, pumped 27.981 million bpd in January, up by 64,000 bpd from December, going by secondary sources.
This meant that OPEC was only able to raise its crude oil production by just 64,000 barrels per day (bpd) in January 2022, well below target, supplying fewer barrels to the market than promised.
In all, the biggest increase in crude oil production came from Nigeria, Saudi Arabia, the United Arab Emirates (UAE), and Kuwait, while output declined in OPEC’s second-largest producer Iraq, as well as in Venezuela and Libya.
Even the top producer, Saudi Arabia, failed to deliver its 110,000 bpd monthly increase, raising its oil production in January by 54,000 bpd to 9.999 million, below its 10.122 million bpd quota for January per the OPEC+ deal.
However, Saudi Arabia self-reported a much higher production increase last month as based on direct communication from members, Saudi Arabia boosted its production by 123,000 bpd to 10.145 million.
Despite tightening oil market, OPEC and its allies, OPEC+ has continued to add a measured 400,000 barrels per day increase in production to the market.
For months, Nigeria has been unable to meet its required share of the OPEC quota, being 1.683 million bpd in December, 1.701 million bpd in February and now 1.718 in March.
Poor upstream infrastructure, sabotage, oil theft as well as lack of investment have been blamed for the ongoing default.
However, in spite of the increasing demand pressure, OPEC countries and their allies had agreed to continue feeding a modest amount of additional oil into the market.
Oil prices are currently hovering at seven-year highs of $90 a barrel, prompting expectations from high consuming nations on OPEC to wet the market and bring down rising prices.
But for half a year now, OPEC+ has actually added lower volumes to the market each month than the 400,000 bpd nominal monthly increase announced in each of the OPEC+ meetings since August 2021.
For instance, the cartel was a massive 800,000 bpd behind its overall production quota in January, as the producers in the pact increased output by just 260,000 bpd last month, an Argus survey showed earlier.
But the cartel said that worries about the Omicron variant of the coronavirus are steadily fading while the global economy heats up, supporting mounting oil demand that could soon surpass the cartel’s expectations reported only weeks earlier.
The international benchmark last month climbed about 20 per cent and eclipsed $90 per barrel and has held above that level since early this month, topping $92 in intraday trading yesterday.
OPEC had in early January predicted global demand would rise by 4.15 million bpd and that consumption would exceed 100 million bpd in the third quarter, returning demand to pre-pandemic levels.
In the latest report it stuck with that forecast but said based on current consumption trends, it could soon revise its outlook higher.
It left its demand outlook for global oil demand growth unchanged while signalling optimism about prospective increases in transport fuel consumption.
OPEC marginally adjusted higher its projections for global demand by 10,000 bpd for the full year, to an average of 100.8 million bpd, revised its third-quarter outlook up by 40,000 bpd to 101.32 million bpd and raised its fourth-quarter estimate by 20,000 bpd to 102.92 million bpd.
Before now, in December, with a daily underperformance figure of 78,000 barrels per day, THISDAY had reported that Nigeria lost as much as 2.418 million barrels of crude.
The month also saw Nigeria slump lower than other previous production performances, compared to, for instance, October, in which 1.228 barrels were pumped per day and November during which 1.275 million barrels were produced per day.
