Nigeria Exceeds OPEC Quota in March

• Nigeria Exceeds OPEC Quota in March

Nigeria continues to produce more crude oil in March despite agreeing to a production cut in December 2018.

OPEC and ten non-OPEC allies had agreed to reduce crude oil production by 1.2 million barrels per day for the first half of 2019 to prop up global oil prices and stabilize the oil market.

Nigeria’s Minister of State for Petroleum, Emmanuel Ibe Kachikwu, who pushed for another exemption during the meeting in Vienna, Austria in December 2018, explained it would be hard to cap production because of the country’s challenges, however, he said a moderate reduction by the OPEC+ would be considered.

Nigeria, which was previously exempted from production cuts, was asked to lower crude oil production under the new agreement. The country’s reference level was lowered from 1.738 million barrels per day to 1.685 million bpd.

However, Nigeria has been pumping above agreed quota since February, according to data from S&P Global Platts. In February, Nigeria produced 1.88 million bpd, 190,000 bpd above its OPEC cap.

The new data for March showed the country continued to exceed its quota and produced 1.92 million bpd during the month, a report published by Bloomberg showed. Its highest in three years.

Still, OPEC’s total production in March was 30.40 million bpd, the lowest since 2015 and 280,000 barrels per day lower than February.

This was largely due to the U.S. sanctions on exports from Iran and Venezuela. Therefore, OPEC is likely to overlook Nigeria’s excess oil production since its offsetting market deficit and moderating prices.

Brent crude oil, against which Nigerian oil is measured, rose above $69 a barrel on Wednesday and has since remained in range.

Nigeria’s foreign exchange reserves rose to a 5-month high in March as high oil prices and crude oil production continued to support government efforts at boosting reserves and stimulating growth.

The foreign reserves rose above $44 billion in March.