Business

Hope Rises As Nigeria Boosts OPEC’s Crude Oil Output For Third Month

Nigeria again ramped up crude oil production in October, to boost the output by the Organisation of Petroleum Exporting Countries (OPEC) for the month, according to a survey by Reuters on Tuesday.

Nigeria increased exports in October without any major disruption to shipments, according to shipping data and sources in the survey, increasing output by 50,000 bpd.

The country is targeting a further recovery by next year even as oil output has risen for a third straight month. Angola also boosted exports during the month.

The OPEC production figure is despite ongoing cuts by Saudi Arabia and other members of the wider OPEC+ alliance to support the market.

Last month, Nigeria’s production hit 1.34 million barrels per day, the highest in about 21 months.

But despite the marginal gains in crude oil production, THISDAY recently reported that Nigeria’s total losses to underproduction was an estimated $3.89 billion in the third quarter of 2023.

The country’s OPEC production is currently 1.74 million barrels per day but could be slashed to 1.38 million barrels per day next year, if Nigeria does not ramp up crude oil volume soon.

However, the survey found that OPEC pumped 27.90 million barrels per day, up by 180,000 bpd from September. Production in August had risen for the first time since February.

The steady rise in OPEC output is largely being driven by a small number of producers managing to overcome internal or external factors that have curbed supply, such as US sanctions or unrest. Despite the rise in output, oil prices are finding support from conflict in the Middle East.

Smaller increases came from Iraq and Iran, Reuters said, as Tehran’s output edged up to 3.17 million bpd. This is the highest since 2018, the year Washington re-imposed sanctions on Iran.

Output from the 10 OPEC members that are subject to OPEC+ supply cut agreements rose by 150,000 bpd, the survey found. Saudi Arabia and other Gulf members maintained strong compliance with agreed cutbacks and extra voluntary reductions.

Saudi Arabia kept October and September output close to 9 million bpd, the survey found. The country in September extended a voluntary 1 million bpd output cut until the end of the year to provide extra support for the market.

OPEC’s output is still undershooting the targeted amount by about 560,000 bpd, mainly because Nigeria and Angola lack the capacity to pump as much as their agreed level.

Meanwhile, oil prices were steady on Tuesday as a drop in euro zone inflation was balanced by higher OPEC output. December Brent crude futures were 21 cents, or 0.24 per cent, higher at $87.66 a barrel by 1342 GMT ahead of their expiry.

The more heavily traded January contract rose 7 cents, or 0.08 per cent to $86.42 US West Texas Intermediate crude rose 4 cents, or 0.05 per cent, to $82.35.

Both Brent contracts traded $1 higher earlier in the day, but prices remain below $90 a barrel on weak Chinese economic data and as the conflict in the Middle East remains contained for now.

Emmanuel Addeh in Abuja