The Organisation of Petroleum Exporting Countries and allies (OPEC+) on Sunday agreed to restore Nigeria’s oil production to 1.829 million barrels per day (mbpd) following a new agreement reached between members to ease the standoff between two oil-producing giants, Saudi Arabia and the United Arab Emirates.
Nigeria produced 1.48mbpd in June, down from 1.55 million bpd produced in the month of May. Suggesting that Africa’s largest oil producer has fundamental issues preventing it from meeting the old production quota.
The Organization of Petroleum Exporting Countries (OPEC) and its non-OPEC allies reached a deal Sunday to phase out 5.8 million barrels per day of oil production cuts by September 2022 as prices of the commodity hit their highest levels in more than two years.
Coordinated increases in oil supply from the group, known as OPEC+, will begin in August, OPEC announced in a statement.
Overall production will increase by 400,000 barrels per day on a monthly basis from that point onward. The International Energy Agency estimates a 1.5 million barrel per day shortfall for the second half of this year, indicating a tight market despite the gradual OPEC supply boost.
OPEC+ agreed in the spring of 2020 to cumulatively cut a historic nearly 10 million barrels per day of crude production as it faced a pandemic-induced crash in oil prices. The alliance gradually whittled down the cuts to about 5.8 million barrels per day.
The 19th OPEC and non-OPEC ministerial meeting noted that worldwide oil demand showed “clear signs of improvement and OECD stocks falling, as the economic recovery continued in most parts of the world” thanks to accelerating vaccination programs.
International benchmark Brent crude is up 43% year-to-date and up more than 60% from this time last year, with many forecasters expecting to see oil trading at $80 a barrel in the second half of 2021.