OPEC+ Implements Production Cuts Amidst Market Uncertainty, Nigeria Projects Growth
The Organization of Petroleum Exporting Countries (OPEC) has maintained a stable crude oil production, averaging 28.05 million barrels per day (bpd) in December 2023. A Bloomberg survey revealed that Nigeria increased its output by an additional 50,000 bpd, compensating for supply restraints from countries like the United Arab Emirates and Angola, which reduced their production.
According to the report, Nigeria’s daily oil production stood at 1.49 million bpd in December, aligning with a revised quota negotiated for the year. However, data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) indicated a daily production of 1.25 million barrels. OPEC projected Nigeria’s production to reach 1.5 million bpd in 2024, while the federal government aimed for a potential production of up to 2 million bpd this year.
In response to market conditions, OPEC+ has implemented additional production cuts of about 900,000 bpd, led by Saudi Arabia. The UAE agreed to reduce its production by 163,000 bpd, while Iraq planned an additional cut of 220,000 bpd for the first three months of the year. Angola, which exited OPEC in December, maintained its production level despite years of underinvestment.
Looking ahead, countries like Saudi Arabia, Russia, the UAE, Iraq, Kuwait, Kazakhstan, and Algeria intend to gradually increase production based on market dynamics. OPEC+ aims to reduce oil production to prevent a surplus and stabilize declining crude prices, which have dropped from nearly $98 in late September amid concerns about a global economic slowdown in 2024.
In January 2024, Brazil is set to join OPEC, adding to the group’s dynamics. However, Nigeria and other African oil producers have expressed reluctance to significantly cut their production quotas, which could impact their ability to attract upstream oil investments. Despite challenges like crude oil theft in the Niger Delta region, Nigeria has maintained its production levels, showing a commitment to addressing such issues.
Nairametrics
