OPEC Output Spikes as Nigeria Boosts Production
The Organization of the Petroleum Exporting Countries (OPEC) slightly increased its oil production in December to 29 million barrels per day due to higher output from Nigeria, Commerzbank said in a Monday note, citing surveys conducted by Bloomberg and Reuters.
Nigeria’s production rose by 150,000 to 170,000 barrels per day (bpd) to roughly 1.4 million bpd, its highest level since April 2022, according to the oil group production record.
Despite OPEC+’s agreement to cut output, Nigeria was allowed to ramp up because it had previously been producing less than agreed, the bank noted.
Overall, output by the OPEC countries bound by the production quotas was 655,000 to 780,000 barrels per day below the agreed production cut. >>>Oil Prices Jump on Healthy Demand Outlook
The United Arab Emirates produced well above its quota but only slightly, while Iraq also produced somewhat more than allowed, Commerzbank said.
However, now that output from Nigeria has increased, pressure could grow on the UAE and Iraq to cut production to the agreed level, according to Commerzbank. Otherwise, OPEC+’s ability to stabilize the oil market could be eroded, the bank said.
Elsewhere, Crude oil prices slumped at the start of the year, but this will not set the course for the rest of 2023 as a whole as the oil market is expected to tighten from mid-year at the latest, Commerzbank said in a Friday note.
The bank expects its forecast to be confirmed as the US Energy Information Administration releases its reports including the longer-term prospects for US oil production, which will be of particular interest.
The US has become the world’s largest supplier of oil, but the development of crude production has been disappointing, Commerzbank said. Output highs are not expected to be reached at the end of this year, and if the outlook for 2024 remains subdued, the market is likely to tighten further, Commerzbank said.
Meanwhile, Chinese crude imports, which were presumably also robust in December, are also likely to boost prices, the bank said. #OPEC Output Spikes as Nigeria Boosts Production