Nigeria’s crude output increased by 70,400bpd in August

Nigeria’s crude oil output increased by about 70,400 barrels per day (bpd) to 1,857,000bpd in August 2015, from its July output of 1,787,000bpd going by the current figures released by Organisation of Petroleum Exporting Countries (OPEC) based on secondary sources in its latest monthly oil market report released on Monday. Year-on-year, comparison to August 2014 output of 2,008,000bpd shows a massive drop of 151,000bpd.

“I see Nigeria hitting 2 million plus output again going by the speed of the ongoing reforms in the sector,” an energy analyst told BusinessDay in a telephone interview.

Nigeria, however, still maintained its position as Africa’s number one oil producer in August followed by Angola and Algeria with an output of 1.735 million bpd and 1.109 million bpd, respectively.

Total OPEC crude oil production averaged 31.54 million barrels per day in August, up by 99,000bpd over the previous month. The uptick reflects higher output from Nigeria, Saudi Arabia and Kuwait.

“Crude oil output increased mostly from Nigeria, Saudi Arabia and Kuwait, while production in Iraq and Angola showed the largest drop,” the report said.

Global oil supply decreased by 53,000bpd to average 94,620bpd in August 2015, compared with the previous month. This decline was due to the drop in non-OPEC supply. OPEC said it expected non-member supplies to grow by 880,000 barrels a day, down by 72,000 barrels a day from last month’s report, because of “lower-than-expected output” from the US. In 2016, non-OPEC supplies are expected to increase slightly by 160,000 barrels a day, a downward revision of 100,000 barrels from the previous report.

“US oil production has shown signs of slowing. This could contribute to a reduction in the imbalance of the oil market fundamentals, however, it remains to be seen to what extent this can be achieved in the months to come,” OPEC said.

The OPEC Reference Basket fell below $50 per barrel in August to average $45.46 per barrel, mostly attributed to sell-offs amid enduring oversupply and Chinese economic turbulence. Crude oil futures plunged sharply again to multi-month lows, with ICE Brent ending at $48.21 per barrel and Nymex WTI at $42.89 per barrel. Speculators continued to be bearish in August with net-long positions in oil futures and options at record lows. The Brent-WTI spread narrowed about 52¢ to $5.32 per barrel in August.

On a monthly basis, the OPEC Reference Basket fell a hefty $8.73 or 16.1 percent to stand at $45.46 per barrel, on average in August. Year-to-date, the ORB’s value continues to lag at $53.81 per barrel versus the $104.78 per barrel year-to-date value in 2014.

OPEC, which supplies about one-third of the world’s crude, revised the demand for its own supplies upward this year by about 400,000 barrels a day to 29.3 million barrels or 2.2 million a day less than the member countries pumped in July.