For the second straight month, Angola produced more crude oil than Nigeria in June despite the increase in the output of Africa’s biggest economy, according to a new report by the Organization of the Petroleum Exporting Countries (OPEC).
BusinessDay had reported last month that Nigeria lost its status as Africa’s top oil producer to Angola as its output declined the most in May among its peers in OPEC.
OPEC’s monthly oil market report for July 2022 show that Nigeria’s oil production increased by 134,000 barrels per barrel (bpd) to 1.158 million bpd in June from 1.024 million in May, based on direct communication.
Read also: Angola overtakes Nigeria as Africa’s biggest oil producer
Angola’s oil production rose to 1.175 million bpd in June, up from 1.162 million bpd in May, based on direct communication.
OPEC uses secondary sources to monitor its oil output, but also publishes a table of figures submitted by its member countries.
Nigeria recorded the biggest increase in production among its OPEC peers in June, and the prices of the country’s three major crude oil grades rose.
“On a monthly average, crude differentials to the North Sea Dated benchmark of Bonny Light, Forcados and Qua Iboe rose by $2.45, $3.26, and $2.83, respectively m-o-m in June, to settle at a premium of $5.28/b, $7.61/b, and $6.53/b,”
OPEC said Angolan crude differentials also rose on demand from Europe, adding: “The crude differential of medium-heavy sweet crude Cabinda rose in June by $2.83 m-o-m on average to a premium of $3.76/b.”
According to secondary sources, OPEC’s crude oil production averaged 28.72 million bpd in June 2022, higher by 234,000 bpd compared to the previous month.
“Crude oil output increased mainly in Saudi Arabia, the UAE, IR Iran, Kuwait and Angola, while production in Libya and Venezuela declined,” the 13-member oil cartel said.
OPEC said despite the improvement in fossil fuel prices, the short-term economic outlook for Nigeria was clouded by high inflation, which had reduced private sector optimism and weakened consumer spending.
In May 2022, the composite Consumer Price Index rose to 17.7 percent year-on-year from 16.8 percent y-o-y in the prior month.
The report noted that in response to the elevated inflationary pressures, the Central Bank of Nigeria raised its policy rate by 150 basis points to 13 percent, bringing borrowing costs to the highest since April of 2020.
It said: “It was the biggest rate hike since July of 2016 amid concerns that persistent inflationary pressures could weigh on the country’s fragile recovery. Meanwhile, the Stanbic IBTC Bank Nigeria PMI fell to 50.9 in June of 2022 from 53.9 in the prior month, pointing to the weakest improvement in business conditions in Nigeria’s private sector since January of 2021.
“Overall, the above-average fossil fuel prices support a firmly positive outlook for the rest of the year, but concerns over soaring inflation would increase uncertainty next year.”
Preliminary data indicates that global liquids production in June increased by 1.32 million bpd to average 99.82 million bpd compared with the previous month.
However, non-OPEC liquids production, including OPEC natural gas liquids (NGLs), was estimated to have increased in June by 1.1 million bpd month-on-month to an average 71.1 million bpd, but was higher by 2.5 million bpd year-on-year.
The report said: “The share of OPEC crude oil in total global production decreased by 0.1 percentage points to 28.8 percent in June compared with the previous month.
“Estimates are based on preliminary data from direct communication for non-OPEC supply, OPEC NGLs and non-conventional oil, while estimates for OPEC crude production are based on secondary sources.”
For 2022, world oil demand is foreseen to rise by 3.4 million bpd, unchanged from last month’s estimate despite some regional revisions, according to OPEC.
“Total oil demand is projected to average 100.3 million bpd. In 1Q22, demand was revised up amid strong economic growth in most consuming countries and a lower baseline,” it said.
