Nigeria’s Bonny Light Dips Below $70, FX Reserves Hit 2021 High

Nigeria’s Bonny Light Dips Below $70, FX Reserves Hit 2021 High

Nigeria’s Bonny Light crude oil grade fell below $70 per barrel amidst rising production output that surpassed the Organisation of Petroleum Exporting Countries (OPEC) and allies members’ (OPEC+) quota. Bonny Light crude oil grade had peaked around $75 in August before it plunged.

Data obtained from the global commodities market revealed that Bonny Light crude oil fell by 1.23% week on week to close at $69.32 per barrel, trading against the trend in the oil market. Crude oil prices witnessed a modest recovery after two consecutive weeks of selling pressure. Brent crude advanced by 0.30% to $67.90 per barrel, while the U.S. West Texas Intermediate climbed marginally by 0.08% to $63.48 per barrel.

In a note, Cowry Asset Limited reported that oil market sentiment turned cautiously bullish, supported by a mix of geopolitical tensions, upbeat inventory data, and renewed demand optimism. This shift signalled the re-emergence of supply-side risks as a key driver of oil market dynamics, analysts said. Oil prices fluctuated significantly during the week on the back of geopolitical tensions and peace talks.

Meanwhile, Nigeria’s external position, the country’s foreign reserves, expanded by 0.56% week-on-week, rising to $41.07 billion – the highest level seen since December 2021, from $40.84 billion in the prior week.

According to analysts, the improved foreign reserves was supported by stronger foreign inflows and offers a modest buffer against external shocks. Sustained accretion to reserves could help ease pressure on the naira in the near term while also boosting investor confidence in the country’s ability to meet its external obligations, according to Cowry Asset Limited.

Nigeria’s crude oil output remained above its OPEC+ quota of 1.50 million barrels per day for the second consecutive month, averaging 1.50 million barrel per day in July, according to OPEC’s August Monthly Oil Market Report (MOMR).

Analysts said the modest outperformance reflects the combined impact of improved security conditions in the Niger Delta and a gradual rebound in upstream investment, supported by the transfer of divested assets from international oil companies to indigenous operators.

Indigenous players have increasingly taken the lead in deploying capital and accelerating field development, which has helped sustain production levels despite lingering operational and infrastructural challenges.

OPEC oil output data revealed that Nigeria’s average crude production in the first half of 2025 stood at 1.47 million barrels per day, underscoring the sector’s gradual but fragile recovery momentum. 

“We expect Nigeria’s crude oil production to remain marginally above the OPEC+ quota through year-end, underpinned by improved security measures and a gradual recovery in sector investments,” Cordros Capital Limited said in a note.

Analysts, however, noted lingering vulnerabilities around pipeline security and operational bottlenecks remain key downside risks that could cap the sustainability of recent gains. #Nigeria’s Bonny Light Dips Below $70, FX Reserves Hit 2021 High Renaissance Energy Targets 300,000 bpd Oil Production by January