The Organisation of Petroleum Exporting Country(OPEC), yesterday said its August crude production increased from 278,000 barrels a day to average 32.56 million barrels a day due to higher output in Nigeria, Libya and Iraq
Besides, the cartel slightly lowered its forecast for growth in world oil demand this year to 1.62 million barrels a day, down from a previous estimate of 3 million barrels a day.
The cartel in its monthly report said total oil demand for 2018 is estimated at 98.82 million barrels a day.
World oil demand growth, in 2019 is forecasted to rise by 1.42 million barrels a day, down by 20,000 barrels a day from OPEC’s previous report, primarily due to a less optimistic outlook for parts of Latin America and the Middle East.
On the supply front, non-OPEC supply is expected to grow 2.02 million barrels a day in 2018, down 64,000 barrels from the previous forecast, while 2019 supply is forecast to grow by 2.15 million barrels a day in 2019, an upward revision of 17,000 barrels a day.
Oil futures remained higher after the data, with October West Texas Intermediate crude futures CLV8, +0.87% on the New York Stock Exchange up 0.9% at $69.89 a barrel, while November Brent crude LCOX8, +0.25% the global benchmark, rose 0.2% to $79.21 a barrel.
The latest data from OPEC, collected both by direct communication with producers and from secondary sources, shows a contrasting picture of production in Iran.
Meanwhile, Nigeria CEO Survey carried out by Oxford Business Group (OBG) in 2018, said accessing credit continues to present problems for many entrepreneurs and risks hampering the country’s efforts to diversify its economy away from a reliance on oil.
As part of its survey on the economy, the global research and consultancy firm asked 124 C-suite executives from across Nigeria’s industries a wide-ranging series of questions on a face-to-face basis aimed at gauging business sentiment.
Asked, 85per cent of respondents said they had positive or very positive expectations of local business conditions for the coming 12 months, up marginally from 84% in OBG’s first survey on Nigeria, which was carried out in 2017.
But , 90 per cent of business leaders interviewed – the same proportion as in 2017’s survey –described the ease of access to credit in the country as difficult or very difficult, indicating that borrowing remains a major hurdle for many, especially small and medium-sized enterprises, which account for around 60% of the economy.
It said executives were more divided about what they felt to be the biggest challenge to doing business in Nigeria, with equal numbers (31%) citing access to capital and corruption as the main obstacles to smooth-running entrepreneurial activity.
OBG’s survey also highlighted the dominant role that oil continues to play in the economy, despite Nigeria’s diversification plans.
More than four-fifths (82%) of interviewees said they regarded a rise in oil prices as the top external event that could impact the national economy in the short to medium term, perhaps indicating that the recession of 2016, caused by the oil price shock, remains fresh in the minds of many.
However, most business leaders were upbeat about Nigeria’s immediate growth prospects. Some 69% of respondents said they expected the economy to expand by between 1% and 3% over the next 12 months, broadly in line with OBG’s forecasts and those of the IMF, which has predicted growth of 2%.
Speaking on the results, Souhir Mzali, OBG’s regional editor for Africa, said that while Nigeria’s economy grew by 0.8% in 2017, compared to a contraction of 1.6% in 2016, the fact remained that its recovery was driven largely by higher international oil prices and increased domestic output of the commodity.
“Nigeria’s return to positive growth in 2017 is certainly reassuring for both the domestic and international business community, and puts the economy on a surer footing,” she commented.
“These improved economic fortunes have brought with them a number of positive developments. However, more remains to be done to achieve economic diversification.”
Mzali added that even though the country possesses several competitive advantages and has announced a record budget of N9.12trn ($25.2bn) for 2018 in a bid to stimulate growth, transforming the structure of its economy will be no easy task.
“Despite attempts to diversify the nation’s revenue base, the non-oil sector grew by a mere 0.8% in the first quarter of 2018, compared to the oil sector’s 14.8%,” she said.
Growth is likely to continue to be driven by oil and subject to potential price fluctuations in the near term, Mzali noted, while medium- to long-term plans to provide for a more diverse economy firm up.
Mzali’s in-depth evaluation of the survey’s results can be found on OBG’s Editor’s Blog, titled ‘Next Frontier’. All four of OBG’s regional managing editors use the platform to share their expert analysis of the latest developments taking place across the sectors of the 30+ high-growth markets covered by the company’s research.