According to a new report from the Organization of Petroleum Exporting Countries, Nigeria has lost its position as Africa's top oil producer to Libya, as crude oil production fell even further last month due to lingering supply disruptions.
Nigeria told OPEC that its oil output fell to around 1.23 million barrels per day in October, down from about 1.25 million bpd the month before, according to the cartel's latest report released on Wednesday.
According to OPEC, Libya's oil production increased to 1.24 million bpd in October from 1.16 million bpd in September, after it overtook Angola as the continent's second-largest producer in December last year.
OPEC monitors its oil output using secondary sources, but it also publishes a table of figures submitted by its members.
Nigerian production fell by 45,000 bpd to 1.35 million bpd in October from around 1.40 million bpd in September, according to secondary sources.
Based on direct communication, Nigeria had the second-largest drop in output among its OPEC peers in October, after Iraq. According to secondary sources, the country's production dropped the most in the month.
According to secondary sources, the 13-member oil cartel's total crude production averaged 27.45 million barrels per day in October, up 220,000 barrels per day month over month.
“Crude oil output increased mainly in Saudi Arabia, Venezuela, the UAE, and Kuwait, while production in Nigeria, Gabon and Equatorial Guinea declined,” it said.
OPEC said crude differentials of light and medium sweet crude rose in the Mediterranean and West African markets in October on good buying interest from European buyers, strong refining margins, supply disruptions in Libya and Nigeria.
“However, soft demand from Asian refiners for Atlantic Basin crude amid unfavourable west-to-east arbitrage capped the rise. Crude differentials of Bonny Light, Forcados, and Qua Iboe rose firmly on a monthly average in October by 70¢, $1.06, and 75¢, respectively, to stand at premiums of 10¢/b, 27¢/b, and 4¢/b,” it added.
A London-based economic research firm, Capital Economics, said in a note that the increase in OPEC’s oil output in October was below its target of 400,000bpd.
“Once again, Angola and Nigeria were largely responsible for this undershoot. Operational issues brought about by a lack of investment in oil-producing facilities continue to plague output in both countries, while Nigeria is also grappling with recurring militant attacks on key pipelines,” it said.
The firm said with these issues unlikely to be resolved soon, OPEC would probably continue to undershoot its planned increases in output in the months ahead.
It said, “This will do little to alleviate the signs of undersupply in the oil market. For example, the price spreads between front-month futures and longer-dated futures are now as negative as any time in recent years, which normally indicates a lack of near-term supply.
“Despite persistently undershooting its target, we doubt OPEC will make any major changes to its output policy at its next meeting on December 2. Admittedly, external pressure on the group has continued to grow, with the US now reportedly considering a release of oil stocks from its strategic reserve.”
Source: PUNCH
Disclaimer: Comments and opinions on any part of this website are the opinions of blog commenters or anonymous individuals, and do not reflect Strenuous Blog position.