Oil prices climbed above $81 on Monday as the Organisation of Petroleum Exporting Countries and its allies announced that it would maintain its steady output increase by 400,000 barrels per day in November, its highest since 2014.
OPEC also said Nigeria’s crude oil production slipped by 130,000 barrels per day in the third quarter of the year.
The International crude oil benchmark, Brent, traded 2.75 per cent higher at $81.46 per barrel as of 3:43 pm Nigerian time on Monday, after the announcement by the Joint Ministerial Monitoring Committee, according to Oilprice.com.
A report by Bloomberg said that the meeting would be followed by a full ministerial gathering to review the recommendation.
The United States West Texas Intermediate rose by 2.52 per cent to trade at $77.79 per barrel at the same time. Bloomberg said that data modelled by OPEC+ showed that demand would outstrip supply over the next two months. Yet, the alliance is unlikely to add more than the planned 400,000 barrels per day output.
According to OPEC’s monthly oil market report, Nigeria’s oil output dropped by 9.28 per cent in Q3 2021 as average daily production dropped from 1.40 million barrels in June to 1.27 million barrels in August.
The average daily production in July was 1.39 million barrels per day. This showed that despite the rise in oil prices during the period, Nigerian production kept declining.
The Minister of State for Petroleum, Timipre Sylva, at a conference in Dubai in September attributed Nigeria’s production struggles to technical issues from re-tapping reservoirs that were earlier shut to comply with stringent cuts from OPEC.
He said output could rebound to around 1.7 million barrels per day by November and two million barrels per day by the end of the year.
However, experts have said that the possibility of production reaching 1.7 million barrels before the end of the year was unlikely, placing their estimates to the first quarter of 2022 instead.
Energy expert, Charlotte Essiet, who is also the Director, Corporate and Regulatory Affairs at AOS Orwell, told our correspondent that from data available, oil production tended to slow year-on-year in the fourth quarter.
She said, “Oil price increases but demand growth is currently flat. The production rate of 1.7 million barrels per day is achievable in Q1 2022.”
Senior manager, sales and marketing at Geoplex Drillteq Limited, Mr Olakunle Dosunmu, told our correspondent that the lack of investment in production when the prices were low was factor responsible for the decline.
Hopefully, he added, in the first quarter of 2022, the country’s production level could be recovered.