Nigeria Raises Crude Oil Production by 65,000bpd to hit 1.25m Daily Output in June

Nigeria's crude oil production experienced a slight increase of 65,000 barrels per day in June, reaching 1.25 million barrels per day. However, this fell significantly short of the 1.742 million barrels per day target set by OPEC for the country. Despite retaining its position as Africa's leading oil producer, Nigeria's output was still far below the projected 1.69 million barrels per day in the 2023 budget.

The rise in production was mainly observed at the Qua Iboe, Forcados, and Escravos terminals, with notable increases in barrels produced. However, when including condensates (which are excluded from OPEC computations), the overall production in June reached 1.473 million barrels per day, representing a modest 3.14% rise from May.

The Nigerian government has attributed the decline in oil output to issues such as oil theft, asset vandalism, and reduced investment in the sector. Efforts have been made to address these challenges, including engaging ex-militant Tompolo to protect oil assets in the Niger Delta.

Angola closely followed Nigeria in terms of total oil production, reporting 1.119 million barrels per day in June. Meanwhile, Algeria's output decreased to 953,000 barrels per day. OPEC has responded to Africa's overall lag in quota production by lowering its projected output for 2024. Nigeria's projected output for next year has also been reduced to 1.38 million barrels per day.

Despite Nigeria's struggles to meet its production targets, oil prices continued to rise, reaching their highest levels in nearly three months. Brent crude, Nigeria's benchmark, climbed to $80.56 per barrel, while US West Texas Intermediate crude futures rose to $75.94 per barrel. The rally in oil prices can be attributed to voluntary supply cuts by major producers Saudi Arabia and Russia, as well as signs of a tightening market.

The International Energy Agency (IEA) predicted a record high oil demand this year, and OPEC lifted its crude oil demand forecast for 2023 to 2.4 million barrels per day. The organization also revised its expectation for this year's oil demand, which increased by 100,000 barrels per day from the previous month's forecast. Global oil demand is projected to grow by 2.2 million barrels per day next year, primarily driven by the rebound of Chinese economic activity.