Nigeria: Nigerian oil production falls in January
Latest reading: Brent crude oil prices averaged USD 78.19 per barrel in January, up 6.8% from December. On 31 January, the commodity traded at USD 76.81 per barrel, up 2.8% from 31 December. Prices rose to a five-month high on the heels of improving demand prospects.
Turning to production, Nigerian oil output edged back to its OPEC+ quota of 1.50 million barrels per day (mbpd) in January from December’s upwardly revised 1.52 mbdp. Nonetheless, production remained below its 10-year average of 1.55 mbpd.
In other news, in early February, Nigeria’s upstream oil regulator said that it would cancel export permits of producers that fail to meet their supply quotas to local refineries. By boosting fuel production, the decision aims to reduce the country’s reliance on imports.
Outlook: Oil output is projected to rise in 2025 relative to 2024 and to reach its highest level since 2020. Rising capacity in the Dangote refinery will boost domestic demand for crude, prompting an increase in production. That said, the country’s output is expected to fall short of its OPEC+ quota of 1.50 mbpd, dented by the uncertain domestic regulatory environment and a precarious security situation. Renewed turmoil in the oil-producing Niger Delta poses a key downside risk.