Oil output rises to 1.23mbpd, and OPEC quota is raised
By Jeph Ajobaju, Chief Copy Editor
Crude output rose to an average 1.238 million barrels per day (mbpd) in Nigeria in June but less than the 1.766 mbpd allocated by the Organisation of Petroleum Exporting Countries (OPEC).
OPEC Oil Market Report for July 2022 shows that Nigeria’s oil production increased by 5,000 bpd in June compared with 1.233 mbpd in May. The cartel has raised Nigeria’s quota to 1.799 mbpd in July.
“According to secondary sources, averaged 28.72 mbpd in June 2022, higher by 234,000 barrels per day month-on-month.
“Crude oil output increased mainly in Saudi Arabia, the United Arab Emirates, Iran, Kuwait and Angola, while production in Libya and Venezuela declined,’’ the report said.
Despite the improvement in fossil fuel prices, it explained, the short-term economic outlook for Nigeria was affected by high inflation, which had reduced private sector optimism and weakened consumer spending.
It noted that the composite Consumer Price Index (CPI) rose to 17.7 per cent in May from 16.8 per cent in April.
“In response to the elevated inflationary pressures, the Central Bank of Nigeria [CBN] raised its policy rate by 150 basic points to 13 per cent bringing borrowing costs to the highest since April of 2020.
“It was the biggest rate hike since July of 2016 amid concerns that persistent inflationary pressures could weigh on the country’s fragile recovery.”
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Weakest improvement in business conditions
“Meanwhile, the Stanbic IBTC Bank Nigeria Purchasing Manger’s Index fell to 50.9 in June of 2022 from 53.9 in the prior month, pointing to the weakest improvement in business conditions in Nigeria’s private sector since January of 2021,” OPEC added, per Nairametrics.
“Overall, the above-average fossil fuel prices support a firmly positive outlook for the rest of the year, but concerns over soaring inflation would increase uncertainty next year.’’
Nigeria struggles to meet OPEC quota
OPEC has been gradually relaxing its output cuts in place since the outbreak of the coronavirus pandemic in 2020.
But Nigeria struggles to meet its production quota because of several challenges, including vandalisation of facilities and oil theft.
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