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Nigeria’s Oil Output Rises Slightly to 1.3mbpd in July, OPEC Reports

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Nigeria’s crude oil production saw a modest increase in July 2024, according to the latest data released by the Organisation of the Petroleum Exporting Countries (OPEC).

The report indicates that the country’s average daily output rose to 1.307 million barrels per day (mbpd), marking a slight improvement from the 1.27 mbpd recorded in June.

This increment comes amid ongoing claims by top Nigerian officials, including President Bola Tinubu and the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, who had earlier asserted that the nation’s oil production had surged to 1.6 mbpd.

However, OPEC’s figures present a different narrative, showing a more conservative estimate of Nigeria’s oil production capabilities.

In his August 4 nationwide broadcast, President Tinubu highlighted the supposed increase in oil production as a significant achievement of the reforms his administration has implemented since taking office in May 2023.

He credited these reforms, which include measures aimed at addressing gaps in the Petroleum Industry Act, for what he described as a “resurgence” in the nation’s oil and gas sector.

“Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act,” Tinubu stated. “Last month, we increased our oil production to 1.61 million barrels per day, and our gas assets are receiving the attention they deserve.”

Similarly, NUPRC’s Komolafe had, in a public statement on July 26, also cited a daily production figure of 1.61 mbpd as of July 23, 2024.

These assertions have raised questions, particularly in light of OPEC’s more conservative data.

OPEC’s Monthly Oil Market Report for August 2024 highlights that Nigeria added an average of 30,000 barrels per day to its production, elevating the output from 1.27 mbpd in June to 1.307 mbpd in July.

The report, based on direct communication with Nigerian authorities, also estimates Nigeria’s daily crude production at 1.38 mbpd in July, as per secondary sources.

The discrepancy between the Nigerian government’s reported figures and those provided by OPEC has sparked debate over the accuracy of the official data.

Critics argue that the gap underscores the challenges Nigeria faces in accurately reporting and managing its oil production, a critical component of its economy.

Despite the slight increase in production, Nigeria’s oil industry continues to grapple with various challenges, including oil theft, pipeline vandalism, and fluctuating global oil prices.

These issues have impeded the country’s ability to reach its full production potential, even as the government expresses optimism about achieving higher output levels.

Speaking recently at a meeting with maritime stakeholders, Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC), Mele Kyari, reiterated the government’s commitment to increasing oil production to two million barrels per day by the end of the year.

He said continued collaboration with security agencies to combat oil theft and pipeline sabotage is important.

“The target is to increase production to two million barrels by the end of the year, and we are fully committed to doing that,” Kyari said. “I appreciate the support of the Nigerian Navy in making this possible. Pipeline vandalism has also decreased significantly, and there is a lot currently happening in the industry.”

As Nigeria continues its efforts to boost oil production, the discrepancies in reporting highlight the need for greater transparency and accuracy in the country’s energy sector.

The government’s ambitious targets will require not only effective reforms but also reliable data to ensure that progress is accurately measured and reported.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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New Petrol Prices to Range Between N857 and N865 Following NNPC-Dangote Deal

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Petrol

Hopes for cheaper Premium Motor Spirit (PM), otherwise known as petrol, rose, last night, as indications emerged that the product may sell for between N857 and N865 per litre after the Nigerian National Petroleum Corporation Limited (NNPCL) starts lifting the product from Dangote Refinery today.

It was learnt that the NNPCL, as the sole off-taker of petrol from the refinery, is projected to lift the product at N960/N980 per litre and sell to marketers at N840/N850 to enable Nigerians to get it at between N857 and N865 at the pump at filling stations.

However, whether uniform product prices would apply at filling stations nationwide was unclear.

As of yesterday, petrol sold at N855 per litre at NNPCL retail stations in Lagos and it was the cheapest anyone could buy the product while major marketers sold around N920.

At independent marketers’ outlets, the price was over N1,000. Elsewhere across the country, PMS sold for more than N1,200 per litre.

Sources said the new arrangement from the NNPCL and Dangote Refinery negotiations, spanning more than one week, would allow Nigerians to get petrol at between N857 and N865 per litre and represents an average under-recovery of about N130 to NNPCL.

President Bola Tinubu, Sunday Vanguard was made to understand by a Presidency source, made it clear to the negotiating parties that “the price at which petrol would be sold to Nigerians should not be such that would place heavy financial burden on them while dealing with the new reality of the prevailing price”.

The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, has, meanwhile, expressed optimism that the deal would reduce the pressure on foreign exchange (FX) demands and shore up the value of the Naira – presently, between 30% and 40% of FX demands go into the importation of PMS.

Chief Corporate Communications Officer, NNPC Ltd., Olufemi Soneye, who confirmed the readiness of the company to start lifting petrol today, told Sunday Vanguard, yesterday: “NNPC Ltd has started deploying our trucks and vessels to the Dangote Refinery to lift PMS in preparation for the scheduled lifting date of September 15th, as set by the refinery.

“Our trucks and personnel are already on-site, ready to begin lifting. We expect more trucks, and the deployment will continue throughout the weekend so we can start loading as soon as the refinery begins operations on September 15, 2024.”

Soneye hinted that at least 100 trucks had already arrived at the refinery for the petrol lifting, adding that the number of trucks could increase to 300 by Saturday evening.

On his part, Executive Secretary, of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Olufemi Adewole, said: “We have been lifting diesel (AGO) and aviation fuel (jet fuel) and we look forward to lifting petrol (PMS).”

On pricing, he said: “We await clarity in respect of the pricing mode, and once that is clarified, we’ll do the needful towards meeting the energy needs of Nigerians.”

Yesterday, Edun, the Minister of Finance and Coordinating Minister of the Economy said the structuring of the NNPCL, Dangote Refinery deal in Naira would assist in reducing pressure on the local currency.

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Oil Prices Surge as Hurricane Francine Disrupts U.S. Gulf Production, Brent and WTI See Gains

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Oil prices rose on Friday, extending a rally sparked by output disruptions in the U.S. Gulf of Mexico, where Hurricane Francine forced producers to evacuate platforms before it hit the coast of Louisiana.

Brent crude oil, against which Nigerian crude oil is priced, rose by 34 cents, or 0.5%, to $72.31 per barrel while U.S. West Texas Intermediate crude futures rose by 38 cents, or 0.6%, to $69.35 a barrel.

If those gains hold, both benchmarks will break a streak of weekly declines, despite a rough start that saw Brent crude dip below $70 a barrel on Tuesday for the first time since late 2021. At current levels, Brent is set for a weekly increase of about 1.7%, and WTI is set to gain over 2%.

Oil producers assessed damages and conducted safety checks on Thursday as they prepared to resume operations in the U.S. Gulf of Mexico, as estimates emerged of the loss of supply from Francine.

UBS analysts forecast output in the region in September will fall by 50,000 barrels-per-day (bpd) month-over-month, while FGE analysts estimated a 60,000 bpd drop to 1.69 million bpd.

The supply shock helped oil prices recover from a sharp selloff earlier in the week, with demand concerns dragging benchmarks to multi-year lows.

Both the Organization of Petroleum Exporting Countries and the International Energy Agency this week lowered their demand growth forecasts, citing economic struggles in China, the world’s largest oil importer.

A shift towards lower-carbon fuels is also weighing on China’s oil demand, speakers at the APPEC conference said this week.

Official data showed nearly 42% of the region’s oil output was shut-in as of Thursday.

China’s crude oil imports averaged 3.1% lower this year from January through August compared to the same period last year, customs data showed on Tuesday.

“Flagging domestic oil demand in China has become a hot topic and was further underlined by disappointing August trade data,” FGE analysts said in a note to clients.

Demand concerns have grown in the United States as well. U.S. gasoline and distillate futures traded at multi-year lows this week, as analysts highlighted weaker-than-expected demand in the top petroleum consuming country.

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Oil Prices Surge as Hurricane Threat Looms Over U.S. Gulf Coast

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markets energies crude oil

Oil jumped in Asian trading on Monday as a potential hurricane system approached the U.S. Gulf Coast, and as markets recovered from a selloff following weaker-than-expected U.S. jobs data on Friday.

West Texas Intermediate crude oil rose 72 cents, or 1.06%, to $68.39 a barrel while Brent crude oil was up 71 cents, or 1%, at $71.77 a barrel.

Prices had gained as much as $1 during early Asian trading before pulling back.

Analysts said the bounce was in part a reaction to a potential hurricane in the U.S. Gulf Coast.

A weather system in the southwestern Gulf of Mexico is forecast to become a hurricane before it reaches the northwestern U.S. Gulf Coast, the U.S. National Hurricane Center said on Sunday.

The U.S. Gulf Coast accounts for some 60% of U.S. refining capacity.

“Sentiment recovered somewhat from last week’s selloff,” said independent market analyst Tina Teng.

At the Friday close, Brent had dropped 10% on the week to the lowest level since December 2021, while WTI fell 8% to its lowest close since June 2023 on weak jobs data in the U.S.

A highly anticipated U.S. government jobs report showed nonfarm payrolls increased less than market watchers had expected in August, rising by 142,000, and the July figure was downwardly revised to an increase of 89,000, which was the smallest gain since an outright decline in December 2020.

A decline in the jobless rate points to the Federal Reserve cutting interest rates by just 25 basis points this month rather than a half-point rate cut, analysts said.

Lower interest rates typically increase oil demand by spurring economic growth and making oil cheaper for holders of non-dollar currencies.

But weak demand continued to cap price gains.

The weakness in China is driven by economic slowdown and inventory destocking, Jeff Currie, chief strategy officer of energy pathways at U.S. investment giant Carlyle Group, told the APPEC energy conference in Singapore on Monday.

Refining margins in Asia have slipped to their lowest seasonal levels since 2020 on weak demand from the two largest economies.

Fuel oil exports to the U.S. Gulf Coast fell to the lowest level since January 2019 last month on weaker refining margins.

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