By Kayode Tokede
The Organization of the Petroleum Exporting Countries (OPEC) has disclosed that Nigeria’s crude oil production to hit 1,685 thousand barrels per day (tb/d) in second quarter of 2018.
The report explained that Nigeria crude oil production was 1,780 tb/d in the first quarter of 2018 as against 1,760 tb/d reported in fourth quarter of 2017.
The International organization in its Oil Market Outlook for 2019, stated that Crude oil output increased mostly in Saudi Arabia, Iraq, Nigeria, Kuwait and UAE, while production showed declines in Libya, Venezuela and Angola.
According to secondary sources, total OPEC-15 crude oil production averaged 32.33 million barrel (mb/d) in June, an increase of 173 tb/d over the previous month.
The report said OPEC Reference Basket (ORB) eased by 1.2per cent month-on-month (m-o-m) in June to average $73.22/barrel.
According to the OPEC report, “The ORB ended 1H18 higher at $68.43/b, up more than 36per cent since the start of the year. Similarly, Dated Brent, WTI and Dubai all decreased by 3.5per cent, 3.1per cent and 0.8per cent, respectively.
“Crude oil futures prices mostly fell on expectations that OPEC and participating non-OPEC producers in the ‘Declaration of Cooperation’ will gradually increase production to full conformity levels. ICE Brent averaged $1.07 (1.4per cent) lower at $75.94/b in June m-o-m, while NYMEX WTI lost $2.66 (3.8%) to average $67.32/b.
“Similarly, DME Oman decreased by 97¢ (1.36%) to stand at $73.63/b. The Brent/WTI spread widened further to $8.62/b in June m-o-m. Year-todate, ICE Brent is 35.1per cent higher at $71.16/b, while NYMEX WTI has risen 31.1per cent to $65.46/b, compared to the same period a year earlier. The speculative net long positions ended June higher, particularly NYMEX WTI, with the long to short ratio increasing sharply to 21:1 from 7:1.
“All three markets have returned to a strong backwardation, with that of WTI improving significantly on tighter supplies at Cushing, Oklahoma. The sweet/sour differentials narrowed considerably in Europe and Asia, while in the US Gulf Coast (USGC) the spread widened slightly.”
This year, the report said oil demand is expected to grow by 1.65 mb/d, unchanged from the previous month’s assessment, with expectations for total world consumption at 98.85 mb/d.
The following year, 2019, the report stated that, “initial projection indicates a global increase of around 1.45 mb/d, with annual average global consumption anticipated to surpass the 100 mb/d threshold.
“The OECD is once again expected to remain in positive territory, registering a rise of 0.27 mb/d with the bulk of gains originating in OECD America.
“The non-OECD region is anticipated to lead oil demand growth in 2019 with initial projections indicating an increase of around 1.18 mb/d, most of which is attributed to China and India. Additionally, a steady acceleration in oil demand growth is projected in Latin America and the Middle East.”
The report explained that Africa’s oil supply for 2018 is projected to grow by 0.02 mb/d to average 1.52 mb/d (excluding the Republic of Congo that joined OPEC on 22 June 2018). Oil production in 2018 is expected to grow only in Ghana, rising by 0.04 mb/d to average 0.20 mb/d.
“While production in Cameroon and Africa other will both decline by 0.01 mb/d each, production will be stagnant in Egypt, the Sudans, Chad and South Africa in 2018.
“For 2019, oil supply in non-OPEC countries in Africa is expected to grow by 0.09 mb/d, mainly from Ghana, the Sudans and South Africa. According to secondary sources, South Sudan plans to boost oil production from the current level of 0.13 mb/d to 0.29 mb/d in the fiscal year 2018/2019, indicating a target higher than the level recorded shortly before the conflict erupted in late 2013.
“However, regardless of this ambitious plan, oil production in the next year is expected to increase by 0.04 mb/d to average 0.28 mb/d, including Sudan, mainly coming from re-opened fields in Unity, Toma South, Mala, the Munga fields, among others” the report by OPEC added.