Nigeria’s crude oil production output for April increased by 19,000 barrels per day (bpd) according to the OPEC monthly oil market report released on Tuesday May 12, 2015, while the country’s production output, based on secondary sources, rose from 1,867,000bpd in March to 1,886,000 bpd in April.
The country also maintained its position as Africa’s number one oil producer within the period, followed by Angola, Algeria and Libya with an output of 1.612 million (mbpd), 1.099 mbpd and 468,000bpd respectively.
Also, Nigeria’s focus on Europe was enhanced by reduced interest from other regular customers like Brazil, Indonesia and South Africa.
Consequently, it is projected that crude oil prices could rise quickly in the second half of the year and may attain $70 per barrel by the end of 2015 as US shale production tapers and seasonal variations increase demand.
However, Nigeria may have to wait much longer before the benefits of the recent price gains impact on its revenue due to the increasing number of its stranded crude oil cargoes, as a result of the recent struggle to find buyers for its crude.
Recent data show that about 10 – 12 million barrels of Nigerian crude were stranded on the water from the March program.
According to agency reports, weak buying from Asia and other regular buyers of Nigerian crude had left a large overhang of March, April and May cargoes.
But according to the OPEC report, “total OPEC crude oil production averaged 30.84 million barrels per day in April, an average increase of 18,000bpd over the previous month.
Crude oil output increased mostly in Iraq and Iran, while production showed the largest drop in Angola. OPEC crude oil production, not including Iraq, stood at 27.17 million barrels per day in April, down by 29,000bpd over the previous month.”
The OPEC Reference Basket, supported by various bullish factors, rose in April to its highest value this year, increasing by $4.84 or 9.2 percent from $52.46 per barrel in March, to $57.30 per barrel in April.
India, which recently replaced the United States as Nigeria’s biggest oil market, cut its import of Nigeria’s crude, even though its oil imports increased as a result of the drop in oil prices. Buoyed by prospects of a diplomatic deal on Iran’s disputed nuclear programme by end-June, preliminary data show that India shipped in more than 17 per cent more Iranian oil in April than a year before. Six Iranian vessels with about 264,000 barrels per day (bpd) of oil were received in April.
“The top three suppliers of crude oil to China in March are Saudi Arabia, Angola and Russia, accounting for 15 percent, 13 percent and 11 percent respectively”, said the OPEC report.
On the supply side, the OPEC report indicates that “global oil supply decreased by 0.39 million barrels per day, to average 94.10 million barrels per day in April 2015 compared with the previous month.”
The decline of non-OPEC supply in April decreased global oil output, which was partially offset by an increase in OPEC production. The share of OPEC crude oil in total global production increased slightly to 32.8 percent in April, compared with the previous month at 32.6 percent.
FRANK UZUEGBUNAM
