.Crude price nears $83 as OPEC cut suffers setback

Nigeria’s oil production slightly dropped to 1.419 million barrels per day in January against the 1.422 million figure for December, Organisation of Petroleum Exporting Countries (OPEC) confirmed yesterday.

In the face of the country’s revenue crisis, production is about 400,000 less than the projected benchmark in the 2024 budget, which envisaged a 1.78 million daily output.

This came as crude price neared $83 per barrel yesterday afternoon, with the group releasing its monthly report that projects outlook of the world oil market.

The report, which showed that the organisation may have to deal with disunity over its projection cuts aimed at stabilising the oil market, revealed that members produced about 26,342 million per day in January. That is about 350,000 reduction from what they produced in December, while Nigeria produced about 3,000 less of its quota in the period.

While OPEC Secretary General, Haitham Al Ghais, had said the oil cartel would stay proactive and united, Iraq emerged as biggest non-compliant member.

The body indicated that the Asian nation’s cut was only around 98,000 barrels per day. It was to cut 300,000 barrels per day.

In the January data, OPEC put the world economic growth forecast at 2.7 per cent and 2.9 per cent for 2024 and 2.9 2025 respectively, showing an upward projection.

The group’s global oil demand growth forecast for 2024 remained unchanged from last month’s assessment at 2.2 mb/d, but it reversed the increase in non-OPEC liquids production in 2024 from 1.3 million barrels per day to 1.2 million barrels per day.

OPEC said: “The main drivers for liquids supply growth in 2024 are expected to be the U.S., Canada, Guyana, Brazil and Norway. The forecast for non-OPEC liquids supply growth in 2025 stands at 1.3 mb/d, unchanged from the previous month, mainly driven by the U.S., Brazil, Canada, Norway, Kazakhstan and Guyana.

“Separately, OPEC natural gas liquids (NGLs) and non-conventional liquids are forecast to grow by around 64 tb/d this year to average 5.5 mb/d, followed by a growth of 110 tb/d in 2025 to average 5.6 mb/d. OPEC-12 crude oil production in January decreased by 350 tb/d, m-o-m, to average 26.34 mb/d, according to available secondary sources.”

From 2022 to 2024, Nigeria’s oil production has only seen an increase of 200,000 barrels per day going by OPEC statistics. Output averaged 1.2 million bpd in 2022, 1.3 bpd in 2023 and 1.4 bpd in 2024.

While President Bola Tinubu is projecting to raise oil and gas revenue from N2.23 trillion in 2023 to N7.69 trillion in 2024, representing an increase of 344 per cent, the target could only be achieved if oil production moves to 1.78 bpd against the current 1.419 million bpd.