Again, Nigeria’s crude oil output sank in April 2024, raising concerns that the upswing recorded in January and, to some extent, the second month of this year, was largely unsustainable.
Nigeria’s hope of substantially meeting its Organisation of Petroleum Exporting Countries (OPEC) quota was raised in December and January as the volume of output increased significantly from 1.33 million barrels per day (bpd) in the last month to a multi-year high of 1.42 million bpd in January this year.
But that relief appears to have been short-lived, with production falling to 1.32 million bpd in February and 1.23 million bpd in March 2024.
Although April data had yet to be officially released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and OPEC, separate Reuters and Bloomberg surveys, based on shipping data and information from industry sources, indicated that Nigeria recorded a dip.
One of the reviews showed that the country might have recorded a decrease in oil production by as much as 50,000 barrels per day during the month or a 1.5 million total underproduction for the period under consideration.
In all, OPEC pumped 26.49 million bpd during the month that just ended, down 100,000 bpd from March’s revised total, with biggest output reductions coming from Nigeria and Iran.
The Reuters survey was not markedly different from Bloomberg’s, which indicated that OPEC pumped 26.81 million barrels a day in April.
Minor increases by other countries, including Libya, it said, were offset by reductions in Iran and Nigeria.
As a result, supply curbs agreed by the group and its allies at the start of the year to avert a surplus were still unfinished. Iraq and the United Arab Emirates continued to pump several hundred thousand barrels a day above their agreed limits.
Nonetheless, output restraints by others in the alliance, such as Saudi Arabia, Kuwait and Algeria helped buoy oil prices against a fragile economic backdrop, bolstering revenue for its members.
The biggest change last month was in Libya, which increased by 60,000 barrels a day to 1.19 million a day while it restored output halted earlier this year by protests at its largest oil field.
The North African nation is exempt from OPEC+ targets while its oil industry remains severely damaged by years of internal conflict.
Iraq’s output rose modestly to 4.22 million barrels a day, or about 220,000 a day above its OPEC+ target. Baghdad promised to make additional cutbacks in compensation, along with fellow errant alliance member Kazakhstan, but often flouted quotas as it sought revenues to rebuild a shattered economy.
Iran and Nigeria each trimmed supplies by 50,000 barrels a day, respectively, according to the Bloomberg survey. Group leader Saudi Arabia remained stable at about nine million barrels a day.
The 22-nation OPEC+ alliance, which spans other producers, such as Russia is due to meet on June 1 to decide whether to extend its current output curbs into the second half of the year.
The survey is based on ship-tracking data, information from officials and estimates from consultants, including Kpler Ltd., Rapidan Energy Group, and Rystad Energy A/S.
Several members of OPEC+, which include OPEC, Russia and other allies, made new cuts in January to counter economic weakness and increased supply outside the group. Producers agreed in March to keep the cuts in place until the end of June.
Nigerian production declined, with exports falling more sharply, according to some ship trackers, as the Dangote refinery took in more cargoes. An outage briefly affected the Bonny production stream, a source told Reuters, confirming that Nigeria pumped below its target, unlike earlier in the year.
Saudi production edged up and there were small increases from Congo, Equatorial Guinea and Gabon.
OPEC’s official Monthly Oil Market Report covering the month of April will be released on May 14, according to OPEC’s published schedule, while the one by Nigeria’s upstream regulator is usually around the same period.
Earlier in April, Minister of State, Petroleum Resources (Oil), Senator Heineken Lokpobiri, acknowledged Nigeria’s declining crude oil production, after an initial rise in previous months.
Lokpobiri assured that measures were being taken to address the situation, not only to restore production to previous levels, but to increase it in a sustainable manner.
In the response to recent concerns regarding the shortfall in oil production, Lokpobiri stated that this was primarily due to issues encountered on the Trans Niger Pipeline (TNP), coupled with maintenance activities carried out by some oil companies operating in Nigeria.
Meanwhile, oil fell more than one per cent on Wednesday, losing ground for a third straight session on hopes of a ceasefire agreement in the Middle East and by rising crude inventories and production in top consumer the United States.
Expectations that a ceasefire agreement between Israel and Hamas could be in sight had grown following a renewed push led by Egypt, even as Israeli Prime Minister Benjamin Netanyahu had vowed to go ahead with a long-promised assault on Rafah.
Brent crude futures for July were down $1.48, or 1.7 per cent, to $84.85 a barrel by 09.28 GMT, after hitting $84.83 the lowest since March 15.
US West Texas Intermediate (WTI) crude futures for June dropped $1.49, or 1.8 per cent, to $80.44, their lowest since March 22.
Emmanuel Addeh
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