BY
FESTUS OKOROMADU
The Organisation of Petroleum Exporting Countries said Nigeria’s crude oil production for the month of May rose to 1.268 million barrels per day (mb/d) from 1.098mb/d in April.
OPEC stated this in its monthly oil market report released on Tuesday.
According to the report, Nigeria alongside Islamic Republic of Iran, Angola was among a few of the organisation’s members whose crude oil output increased during the period.
OPEC however stated that the 1.269 mb/d output production was from a secondary source, while the official figure source said 1.184bpd was recorded during the period.
This is even as the production figure for May is lower than the average 1.277mb/d recorded in the first quarter of 2023.
The report said the total OPEC-13 members’ crude oil production averaged was lower by 464tb/b month-on-month (m-o-m) to 28.06 mb/d in May 2023. With Nigeria, IR Iran and Angola recording increases while Saudi Arabia, the UAE and Kuwait posted decline output.
The OPEC MOMR Oil said all physical crude oil benchmarks declined m-o-m in May, with North Sea Dated falling the most among the main spot benchmarks, dropping by $9.08, or 10.7%, to average $75.82/b. WTI and Dubai front months fell respectively by $7.80 and $8.27, or 9.8% and 9.9%, to settle at $71.64/b and $75.13/b.
Similarly, OPEC Reference Basket value declined in May, dropping by $8.31/b, or 9.9%, to stand at $75.82/b, as all ORB component values dropped alongside their prospective crude oil benchmarks. This largely offset a rise in most official selling prices in all regions.
On a yearly average, the ORB was down $22.63, or 22.0%, from $102.80/b in 2022 to an average of $80.17/b in 2023.
All ORB component values fell last month alongside their respective crude oil benchmarks.
West and North African Basket components – Bonny Light, Djeno, Es Sider, Girassol, Rabi Light, Sahara Blend, and Zafiro – declined by $9.29 m-o-m in May, or 11.0% on average, to $75.02/b. Multiple region destination grades – Arab Light, Basrah Light, Iran Heavy, and Kuwait Export – fell by $8.14 m-o-m, or 9.6% on average, to settle at $76.23/b. Murban crude declined by $8.45 m-o-m, or 10.0% on average, to settle at $75.66/b, and the Merey crude component fell by $6.36 m-o-m, or 10.2% on average, to settle at $56.22/b.
On the economy, the OPEC MOMR said its global GDP growth forecast remains unchanged at 2.6% for 2023.
“World economic growth developments remain uneven among economies. While some economies have performed better than expected in 1H23 with further upside potential to materialize in 2H23, other economies seem to be struggling.
“Since the global pandemic, the divergence in economic growth trends has been strongly influenced by a combination of factors such as monetary and fiscal policy decisions, trade-related disputes, adverse weather conditions, and the repercussions of geopolitical conflicts. In the first half of this year, economic growth was steady in the US and better -than-expected in Japan, but declined in the Euro-zone.
“In the emerging economies better-than-expected 1Q23 GDP growth was recorded in India, Brazil and in Russia. Moreover, the positive effects of China’s reopening have continued to support global economic growth. However, there are rising uncertainties regarding economic growth in 2H23 amid ongoing high inflation, already elevated key interest rates and tight labour markets,” it said.
The OPEC MOMR expressed confidence in the fast recovery of the Nigeria economy.
“Nigeria’s economy grew by 2.4% y-o-y in 1Q23, after growth of 3.6% y-o-y in 4Q22. Nigeria’s economy seems to be continuously challenged by a variety of factors this year. Slowing growth in the services sector, slowing crude oil-output, and a deceleration in manufacturing and farming industries are among the most important issues.
“Additionally, the economy is further burdened by ongoing high inflation and import restrictions. As a consequence, business activity and consumer spending remain subdued. Inflation data for April show an ongoing acceleration, with an annual rate of 22.2% y-o-y, up from 22% y-o-y in March. Food inflation has been a key factor in this rise, reaching 24.6% y-o-y in April, following a rise of 24.5% y-o-y in March.
“Consequently, the Central Bank of Nigeria lifted the key policy rate to 18.5% in May, after 18% in April and following a 50 bp hike in March and a 100 bp hike in January. Despite the challenges, April’s Stanbic IBTC Bank Nigeria PMI recovered strongly to stand at 54 in May, after 53.8 in April, compared with only 42.3 in March, indicating a potential near-term recovery,” the report stated.
