The Organisation of Petroleum Exporting Countries has said Nigeria’s crude oil production in June increased by 25 thousand barrels per day (TBPD) or 1.9 percent to 1.276 million barrels per day (MBPD) as against 1.251mbpd in the previous month of May.
This is according to the production report officially posted by OPEC member Countries for June 2024 as contained in the OPEC Monthly Oil Market Report – July 2024 released on Wednesday.
However, further analysis of the OPEC report, shows that Nigeria’s crude production on a quarter-on-quarter (q-o-q) basis declined by 57tbpd or 4.29 percent to 1.270mbpd in the second quarter of 2024 compared to 1.327mbpd reported in the first quarter of the year.
On a three-quarter analysis, Nigeria’s crude production picked up in the first quarter of 2024 when it recorded 1.327mbpd compared to 1.270mbpd in Q2, 2024 and 1.260mbpd in q4, 2023.
According to OPEC, between April, May and June of 2024, which represents the second quarter of the year, production was highest in April when the country achieved 1.281mbpd production followed by June with 1.276mbpd, while the lowest production of 1.251mbpd was recorded in May.
According to the OPEC report, Nigeria’s average crude oil production seems to have improved since 2024 as average production for 2022 and 2023 was put at 1.138mbpd and 1.187mbpd respectively.
Meanwhile, OPEC’s secondary source report shows that Nigeria’s crude oil production declined by 76tbpd in June down to 2.921mbpd from 1.938mbpd in May, translating to a 2.58 percent decrease.
According to the crude oil cartel group report, secondary sources, total crude oil production averaged of 12 of its members (OPEC-12) was 26.57 mbpd in June 2024, 80tbpd lower, m-o-m.
The report noted that crude oil output increased mainly in Libya, Venezuela and IR Iran, while production in Saudi Arabia, Iraq and the UAE decreased.
At the same time, total non-OPEC DoC crude oil production averaged 14.24 mbpd in June 2024, 45tbpd lower, m-o-m. Crude oil output increased mainly in Kazakhstan and Azerbaijan, while production in Russia decreased.
Giving an overview of the commodity’s performance in terms of price movement during the month, the report noted that, “In June, the OPEC Reference Basket (ORB) value fell slightly, decreasing by 37¢, or 0.4%, m-o-m, to stand at $83.22/b, amid mixed performance of ORB component-related crude benchmarks.
“The ICE Brent’s first-month contract was unchanged m-o-m, standing at $83.00/b in June, while NYMEX WTI rose by 8¢, or 0.1%, m-o-m, to average $78.70/b. DME Oman crude oil futures prices fell in June by $1.05, or 1.3%, m-o-m, to settle at $82.69/b.
“The spread between the ICE Brent and NYMEX WTI first-month premium narrowed for the second consecutive month in June, as the value of international benchmark Brent futures weakened compared with WTI futures”.
It added that “Speculative activity in the oil futures market was highly volatile in June, which contributed to fueling price volatility. Hedge funds and other money managers continued to further close bullish positions in the first week of June after the previous month’s heavy selloff, with ICE Brent net long positions falling to their lowest point since 2014. However, the sentiment shifted among money managers in the second week of June amid increasing optimism about transportation fuel use during the summer driving season. Money managers raised the combined ICE Brent and NYMEX WTI net long position by 99.1% between the weeks of 4 and 25 June, buying the equivalent of 196mb.
“The forward curve of ICE Brent and NYMEX WTI strengthened in June compared with the previous month, and the nearest months’ time spreads moved into stronger backwardation, despite volatile prices. Traders turned optimistic about the market outlook, and selling pressure from speculators that had weighed on front[1]month prices eased. DME Oman and Dubai price structures softened but remained in backwardation.
“The price differential between sweet and sour crude narrowed further m-o-m in June in Europe and the US Gulf Coast (USGC), amid sustained availability of light sweet crude in the Atlantic Basin, while the margin spread between light and heavy distillate products stayed consistently narrow.
Meanwhile, the spread widened slightly in Asia but remained notably low.”