Traditionally, Nigeria has produced 2.5m barrels of crude oil a day but according to the latest industry report from the Organisation of Petroleum Exporting Countries (Opec), November output dropped to 1.6m barrels. According to Opec, Nigeria recorded the biggest drop in output among its members, followed by Saudi Arabia, the group’s biggest producer.
In its latest monthly oil market report, Opec said Nigerian production fell to1.6m barrels a day in November, down from 1.81m barrels in October. Angola on the other hand, saw its oil output drop to 1.72m barrels in November from 1.76m barrels a day produced in October.
Nigeria's minister of state for petroleum, Dr Ibe Kachukwu, said that Opec will hold urgent talks if crude prices do not recover by February. With prices currently below $35 a barrel, many Opec members are selling their crude at below production costs compared with the $100 a barrel price they have become used to recently.
Dr Kachukwu: “It is expected that the upward trend in oil prices will be seen by February next year. If it does not happen, it is clear that Opec will need to have a very urgent meeting.”
On December 4, Opec decided to keep the current output level of around 31.5m barrels per day despite oversupply on the global oil market. Early this week, Brent and WTI benchmark prices sank to lows not seen since 2009 as Brent crude fell below $37 a barrel while the price of the US benchmark WTI dropped to below $35 per barrel.
Yesterday morning, crude oil prices rebounded slightly in early trading with Brent trading at $37.73 and WTI at $36.18 per barrel but they remain well below profitable prices. Opec produced 31.7m barrels of crude oil per day in November, its highest output in over three years and 1.7m barrels over its former production limit.
Russia’s deputy finance minister Maxim Oreshkin, said: Less affluent Opec states like Algeria, Angola, Nigeria and Venezuela have been calling for production cuts in order to increase crude prices but its biggest producer Saudi Arabia is refusing to cut crude output in order to defend its market share. Riyadh is hoping to squeeze out its competitors, primarily the US and Russia.
In a move that some see as Moscow calling Riyadh’s bluff, Russia announced that it is drawing up plans based on the price of oil as low as $30 a barrel until 2022. However, Opec secretary general Abdullah al-Badri, has said that global crude oil prices could witness a rebound within one year.
Most analysts, however, do not expect oil prices to regain the $100 mark until 2017 or later, arguing that producers will continue to pump out more crude than the market can consume. Iran for instance has been clear that it aims to raise its output by at least 1m barrels per day, representing about 1% of global supply, after sanctions against it are lifted next year.
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