September 15, 2020

Nigeria’s oil output at new low

Crude oil price hits $65.85 per barrel after OPEC, Non-OPEC meeting

Low output, price decline pressures 2020 budget


THE Organisation of Petroleum Exporting Countries, OPEC, yesterday, put Nigeria’s oil output at 1.3 million barrels per day, mb/d for the month August 2020, indicating about 40 percent drop against 1.9 mb/d recorded in the corresponding month of 2019.

This also indicates a huge shortfall against the OPEC quota of 1.4 mb/d, which was considered too low in the face of the nation’s huge funding gaps in 2020 budget.

The organisation, which disclosed this in its September 2020 Oil Market Report, obtained by Vanguard, said that the output was based on data collected from what it referred to as ‘direct communication’, adding that the country’s output remained at 1.4 mb/d when based on ‘secondary sources’.

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This is coming as the price of Bonny Light, Nigeria’s premium oil grade, drop to $37.59 per barrel from $43.

The new price, appears driven by the resurgence of Coronavirus pandemic across the world.

Meanwhile, OPEC, which painted a gloomy picture of the market, has stated: “In 2020, the global oil demand contraction is revised down further by 0.4 mb/d, now contracting by 9.5 mb/d, to average 90.2 mb/d. In the OECD, demand is revised higher by around 0.1 mb/d due to lesser-than-expected declines in all sub-regions during 2Q20. ‘‘In the non-OECD, the 2020 oil demand outlook is revised lower by around 0.5 mb/d, due to weaker oil demand performance in Other Asia, particularly in India. Turning to 2021, the negative impact on oil demand in Other Asia is projected to spill over into 1H21.

“At the same time, a slower recovery in transportation fuel requirements in the OECD will limit oil demand growth potential in the region. Additionally, risks remain elevated and skewed to the downside, particularly in relation to the development of COVID-19 infection cases and potential vaccines.

“Furthermore, the speed of recovery in economic activities and oil demand growth potential in Other Asian countries, including India, remain uncertain. As such, 2021 world oil demand is now forecast to grow by 6.6 mb/d, some 0.4 mb/d lower compared with the previous month’s assessment to average 96.9 mb/d.”