According to its rig count and output volume, Nigeria’s oil production has been consistent over the last three months, despite being low, according to the most recent figures from OPEC released yesterday.
Additionally, given “expectations of a revival of Covid-19 restrictions and persistent political concerns” in the second half of 2022, the cartel has lowered its worldwide demand growth prediction for this year to 3.1 million b/d, down 300,000 b/d from its previous-month estimate.
The organization now projects that in 2022, the global oil demand will be 100.03 million barrels per day (b/d). According to this estimate, demand growth will remain at 2.7 million barrels per day (b/d) in 2023.
According to OPEC, Nigeria’s output increased slightly to 1.18 million barrels per day (mbpd) in July from 1.17mbpd in June based on secondary sources, while its rig count stayed constant at 11 for the two months.
In the second quarter of this year, Nigeria’s oil output fell by around 14.94 million barrels, which indicates that the country’s oil revenues fell by roughly N703.76 billion, or the value of the crude that was lost during the review period.
The fall in Nigeria’s oil production has been regularly lamented by the Federal Government and oil industry players, who blame oil thieves for their acts of vandalism.
Other factors include the incapacity of aged facilities, shut-in oil wells, the national oil corporation, and several independent enterprises to duplicate the capability shown by the departing IOCs.
Due to the aforementioned difficulties, the government’s goal of producing three million barrels per day of oil production and 40 billion barrels of reserves has become all but unattainable. As a result, the reserve has been stuck at 36 to 37 billion barrels for years.
The Organisation for Economic Co-operation and Development (OECD) Americas’ consumption is expected to increase the most this year, according to OPEC, thanks to a rebound in demand for gasoline and diesel in the third and fourth quarters of the US.
Following a relative decrease in retail prices, which should assist the summer driving season, gasoline demand is due for a resurgence, according to OPEC.
It anticipates that after overcoming obstacles brought on by Covid-19 limits put in place earlier in the year, Chinese oil demand, particularly the industrial sector’s demand for distillates, will rise in the second half of 2022.
The International Energy Agency (IEA), which previously pegged its estimate for the year at 2.1 million barrels per day (b/d), is less enthusiastic about demand growth than the oil cartel.
In the second part of the year, OPEC predicts a “gradual economic rebound,” presuming no worsening of the conflict in Ukraine. The report stated that it is still unclear how a “possible further reduction in Russian fossil fuel exports to G7 economies” will affect energy supplies, energy prices, and ultimately, global economic growth.
This year and in 2023, the cartel reduced the call on the crude produced by its members by 300,000 b/d each, to 28.8 million and 29.8 million b/d, respectively.
In terms of supply, OPEC slightly reduced its prediction for non-Opec liquids growth in 2022, from 2.15mn b/d to 2.14mn b/d. Due to “higher-than-expected production in the last two months,” it increased its projections for Russian output this year by 250,000 b/d, to 10.88 million b/d. It increased its forecast for Russian output in 2023 by 90,000 b/d, to 10.43 million b/d.
