According to a new report from the Organization of Petroleum Exporting Countries, Nigeria has lost its position as Africa’s top oil producer to Libya, as crude oil production fell even more last month due to persisting supply problems.
Nigeria reported OPEC that its oil output decreased to around 1.23 million barrels per day in October, down from roughly 1.25 million bpd the month before, according to the cartel’s latest report released on Wednesday.
According to OPEC, Libya’s oil production increased to 1.24 million bpd in October from 1.16 million bpd in September, after it overtook Angola as the continent’s second-largest producer in December last year.
OPEC monitors its oil output through secondary sources, but it also publishes a table of numbers given by its members.
Nigerian production fell by 45,000 bpd to 1.35 million bpd in October from around 1.40 million bpd in September, according to secondary sources.
Based on direct contact, Nigeria had the second-largest decline in output among its OPEC counterparts in October, after Iraq.
According to secondary sources, the country’s production dropped the highest in the month.
According to secondary sources, the 13-member oil cartel’s total crude production totaled 27.45 million barrels per day in October, up 220,000 barrels per day month over month.
“Crude oil output increased mainly in Saudi Arabia, Venezuela, the UAE, and Kuwait, while production in Nigeria, Gabon and Equatorial Guinea declined,” it said.
Oil differentials of light and medium sweet crude climbed in the Mediterranean and West African markets in October, according to OPEC, due to solid refining margins, good buying interest from European consumers, and supply problems in Libya and Nigeria.
“However, soft demand from Asian refiners for Atlantic Basin crude amid unfavourable west-to-east arbitrage capped the rise. Crude differentials of Bonny Light, Forcados, and Qua Iboe rose firmly on a monthly average in October by 70¢, $1.06, and 75¢, respectively, to stand at premiums of 10¢/b, 27¢/b, and 4¢/b,” it added.
According to Capital Economics, a London-based economic research organization, the increase in OPEC’s oil output in October was below its aim of 400,000 barrels per day.
“Once again, Angola and Nigeria were largely responsible for this undershoot. Operational issues brought about by a lack of investment in oil-producing facilities continue to plague output in both countries, while Nigeria is also grappling with recurring militant attacks on key pipelines,” it said.
OPEC will most likely continue to undershoot its anticipated output increases in the months ahead, according to the business, because these difficulties are unlikely to be resolved quickly.
It said, “This will do little to alleviate the signs of undersupply in the oil market. For example, the price spreads between front-month futures and longer-dated futures are now as negative as any time in recent years, which normally indicates a lack of near-term supply.
“Despite persistently undershooting its target, we doubt OPEC will make any major changes to its output policy at its next meeting on December 2. Admittedly, external pressure on the group has continued to grow, with the US now reportedly considering a release of oil stocks from its strategic reserve.”
