- Nigeria Continues to Pump More Oil, Pumps 2.2mbpd in August
Nigeria’s crude oil production rose to 2.2 million barrels per day (mbpd) in the month of August, according to Bloomberg tanker tracking data.
This was after S&P Global Platts said Nigeria pumped around 1.93 mbpd in July, the highest since January 2015.
Nigeria continues to increase crude oil production despite OPEC accord mandating the nation to maintain production at about 1.7 mbpd.
“Some projects that were in development phase a few years back are coming on stream while other producers are ramping up production,” an expert involved in one of the projects stated.
Also, US sanctions on Iran and Venezuela could be “helping to improve the overall appetite for production increment”, says the expert.
However, Nigeria needs oil price to trade above $60 per barrel to fund her 2019 budget. The Federal Government had designed the 2019 budget around 2.3mbpd and at a selling price of $60 a barrel.
In the last few weeks, crude oil had plunged below Federal Government’s $60 benchmark to $57 amid the US-China trade war and growing uncertainty surrounding Brexit.
The oil sector grew at a slower pace of 5.15 percent in the second quarter, according to the recently released GDP report by the National Bureau of Statistics. This was lower than what was recorded in the first quarter.
Similarly, the sector contributed 8.82 percent to the real GDP in the second quarter, again below its first-quarter contribution.
Global uncertain continues to impact commodity prices, which in turn hurts commodity-dependent economies like Nigeria.
Meanwhile, Saudi Arabia has promised to cut production in September to sustain higher prices and remain committed to OPEC accord. The announcement boosted oil price to $62 per barrel on Monday.