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Nigeria Eyes Oil Production Surpassing OPEC Quota Amidst Positive Projections and Global Collaborations

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In a strategic move to exceed the OPEC-imposed oil production quotas, Nigeria, led by the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, is on a trajectory to outperform expectations.

The recent 36th OPEC and non-OPEC ministerial meeting projected Nigeria’s oil production quota at 1.5 million barrels per day (bpd) in 2024.

However, Lokpobiri revealed in a Twitter post that Nigeria currently produces 1.5 million bpd for crude and 300,000 bpd for condensate.

Addressing concerns about Nigeria’s ability to meet these targets, Lokpobiri assured, “What we are producing is much more than what is projected in the 2024 budget estimate.”

Despite discrepancies between OPEC’s projections and Nigeria’s budget estimates, the minister expressed confidence that the country would surpass the outlined targets.

Furthermore, to fortify Nigeria’s position in the global energy landscape, Lokpobiri engaged in a pivotal meeting with Baker Hughes Chairman, Lorenzo Simonelli, on the sidelines of the ongoing 28th United Nations Climate Change Conference (COP28).

Baker Hughes, a global energy technology company, expressed keen interest in sustaining and enhancing its investment in Nigeria’s oil and gas industry. Simonelli emphasized the company’s commitment to contributing to Nigeria’s energy transformation agenda and collaborating on sustainable energy practices.

Lokpobiri commended Baker Hughes for its longstanding partnership with Nigeria and affirmed the government’s commitment to creating an enabling environment for investments in the refinery sector.

The meeting set the stage for a promising collaboration that aligns with Nigeria’s objectives and contributes to global sustainable energy goals.

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Crude Oil

Oil Prices Slide as U.S. Crude Stockpiles Surge, Heightening Demand Concerns

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Oil prices declined on Thursday as concerns over demand intensified due to a larger-than-anticipated build in U.S. crude stockpiles.

Brent crude oil, against which Nigerian oil is priced, dropped by 0.5% to $83.25 a barrel while U.S. West Texas Intermediate crude oil fell by 0.3% to $78.28 a barrel.

The Energy Information Administration’s report revealed a substantial increase in U.S. crude oil stockpiles by 4.2 million barrels to 447.2 million barrels for the week ending February 23rd.

This surge surpassed analysts’ expectations and marked the fifth consecutive week of rising inventories.

While gasoline and distillate inventories witnessed a decline, concerns regarding a sluggish economy and reduced oil demand in the U.S. were amplified.

Satoru Yoshida, a commodity analyst with Rakuten Securities, highlighted that the significant stockpiles have heightened investor worries.

Moreover, the anticipation of delayed U.S. interest rate cuts further weighed on market sentiment, potentially undermining oil demand.

Traders have adjusted their expectations for rate cuts, with an easing cycle predicted to commence in June rather than March as previously anticipated.

Market participants await the U.S. personal consumption expenditures price index for insights into inflation trends, while the possibility of an extension of voluntary oil output cuts from OPEC+ looms over price dynamics, amid lingering uncertainty in the demand outlook and geopolitical tensions in the Middle East.

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Crude Oil Shortage Threatens Dangote, Government Refineries, Minister Raises Alarm

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Dangote Refinery

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has sounded a clarion call over a looming crude oil shortage that threatens the operations of the newly inaugurated Dangote Petrochemical Refinery and government-owned refineries in Nigeria.

Addressing stakeholders at the seventh edition of the Nigeria International Energy Summit in Abuja, Minister Lokpobiri expressed concerns that unless deliberate efforts are made to increase investments and crude oil production, these refineries may struggle to obtain enough feedstock for petroleum product manufacturing.

The Dangote refinery, a colossal project spearheaded by Dangote Industries Limited, has a daily requirement of up to 650,000 barrels of crude oil, while government-owned refineries could need approximately 400,000 barrels.

However, the current pace of crude oil production and investment in Nigeria falls short of meeting these demands.

Minister Lokpobiri highlighted the need to ramp up production and attract investments in the upstream sector to ensure adequate feedstock supply for the refineries.

He emphasized the importance of efficiently utilizing Nigeria’s abundant oil and gas reserves to enhance domestic energy security and economic prosperity.

Furthermore, the minister underscored the significance of investing in energy infrastructure and transitioning towards more environmentally friendly practices to address Nigeria’s energy needs effectively.

The alarm raised by Minister Lokpobiri underscores the urgency for strategic interventions and collaborative efforts to mitigate the impending crude oil shortage and secure the future of Nigeria’s refining industry amidst evolving global energy dynamics.

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Oil Prices Surge as Brent Approaches $83, WTI Nears $78 Amidst Refinery Buying Activity

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Oil prices surged as Brent crude oil approached the $83 price level while West Texas Intermediate (WTI) neared $78 as refineries in the United States and China increased purchases.

Brent crude oil, against which Nigerian oil is priced, gained 1.1% on Monday, signaling a bullish trend in the oil market.

The recent uptick in oil prices comes amidst signs of heightened demand from refineries, particularly in key markets like the US and China.

This surge in demand has contributed to the strengthening of timespreads, indicating tighter conditions in the near term.

Market observers are closely monitoring the International Energy Week in London, where industry leaders are convening to discuss the outlook for the global energy market.

Scheduled speakers include Russell Hardy, the CEO of Vitol Group, a major player in the energy sector.

While tensions in the Middle East and production cuts by the OPEC+ alliance have supported crude prices, increased production from non-OPEC+ countries, notably the US, has capped potential gains.

Analysts predict that oil prices may continue to trade within a range, with Brent crude expected to hover around $83, while WTI remains near the $78 mark, barring significant shifts in market dynamics.

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