Nigeria, JV partners earn $2.67bn from oil export in January

Nigeria and her Joint Ventures partners earned about $2.67 billion from crude oil export in January 2015. According to OPEC monthly oil market report released yesterday Monday February 9, 2015, Nigeria’s production output for January 2015 based on secondary sources averaged 1.94 million barrels per day. With the January average price of $44.18 per barrel, about $2,656,985,200 accrued to the coffers of the country and its JV partners for the first month of 2015.

According to the report, “total OPEC crude oil production in January averaged 30.15 million barrels per day, a decrease of 53,000 barrels per day over the previous month. Crude oil output decreased mostly from Iraq and Libya, while production showed an increase in Angola, Saudi Arabia, Kuwait and the UAE. OPEC crude oil production, not including Iraq, stood at 26.8 million barrels per day in January, up by 226,000 barrels per day the previous month”.

Crude oil global markets tumbled again in January, down over 25 percent month-on-month for the seventh consecutive month, as a glut in oil, coupled with weak demand depressing oil prices, sent the ORB to its lowest value in six years. Crude oil prices started 2015 at a near six-year low, amid plentiful global oil supplies that have pushed oil prices down by almost 60 percent since June 2014, with oil demand growth yet to show signs of accelerating. The market continued to come under pressure, with crude storage at a record high in the US and production reaching a new record.

Crude supplies, both sweet and sour, were plentiful in all regions in January 2015, particularly in Europe, amid rising Iraqi and Russian exports. Over the month, several other bearish market factors helped push prices down further, including a record inventory build in the US, a strong US dollar, and slowing Chinese oil demand growth, as well as a downward revision for global economic growth. Crude oil futures continued their downward curve over the month, with both Nymex WTI and ICE Brent ending below $50/b for the first time in over five-and-a-half years.

On a monthly basis, the OPEC Reference Basket fell to an average of $44.38 per barrel in January 2015, down $15.08/b, or 25.4 percent to its lowest value since February 2009. Compared with a year ago, the ORB value is almost 60 percent lower than it was in January 2014 when it reached nearly $105 per barrel.

Preliminary data for January 2015 also showed that US crude oil imports dropped to average 7.3 million barrels per day, down by 176,000 barrels per day month-on-month and 239,000 barrels per day or 3 percent year-on-year. US monthly product imports declined slightly from the previous month by 30,000 barrels per day, though rising on an annual basis by 491,000 barrel per day or 29 percent.

Japan’s crude oil imports increased in December following a drop the previous month, rising by 475,000 barrels per day or 15 percent to average 3.6 mb/d. The country’s product imports fell in December by 15,000 barrels per day to average 685 tb/d, down by 2 percent month-on-month, though up by 7 percent year-on-year.

Preliminary data indicates that global oil supply decreased by 0.29 mb/d to average 93.15 mb/d in January 2015 compared with the previous month. The decline of OPEC production as well as non-OPEC supply in January decreased global oil output. The share of OPEC crude oil in total global production increased slightly to 32.4 percent in January 2015compared with the previous month.

OPEC in November 27, 2014 meeting decided against cutting its production despite misgivings from its non-Gulf members, after Saudi Oil Minister Ali al-Naimi said the group needed to defend market share against US shale oil and other competing sources. The decision sent oil prices to what was a four-year low close to $71 a barrel. Crude later fell to a near six-year low of $45.19 on January 13. However, on 6 February, crude oil price stood at $53.36 per barrel and Abdullah al-Badri, OPEC Secretary-General have started to express confidence that a bottoming out of prices and a recovery may be under way.

FRANK UZUEGBUNAM