Nigeria’s average crude oil production in May fell to 1.25 million barrels daily in May from 1.28 million bpd recorded in April 2024.
This represents a decline of 30 thousand bpd when compared to the 1.28 million bpd recorded in the previous month of April and the second lowest in 2024.
This is according to the OPEC Monthly Oil Market (MOMR) for the month of May which put total crude oil supply by OPEC+ members at 40.9 million bpd according to secondary sources.
The average crude oil production of 1.25 million bpd for the month under review represents the second lowest crude oil production in 2024 only exceeding the crude oil production in March which stood at 1.23 million.
Despite the low crude oil production, Nigeria remained the biggest crude oil producer in Africa trailed by Angola and Libya
However, according to secondary sources, Nigeria’s crude oil production increased by 74,000 barrels from 1.34 million bpd to 1.41 million bpd in the month under review.
This aligns with an earlier survey by Reuters which stated that Nigeria’s crude oil production in May increased by around 50 thousand bpd in May.
Global demand for oil and average price in May
- According to the report, the worldwide growth in demand for crude oil in May was the same as the previous month at 2.2 million.
- However, it projected daily crude oil demand across the globe to reach 104.5 mb/d in 2024.
- In May, the average crude oil price according to OPEC Reference Basket (ORB) decreased by $5.53, or 6.2%, month-on-month, averaging $83.59 per barrel.
- Oil futures prices also saw a decline, with the ICE Brent front-month contract dropping by $6.00, or 6.7%, to an average of $83.00 per barrel.
Impact of decline in oil production in Nigeria
The decline in crude oil production in Nigeria highlights the topsy-turvy production performance of the oil sector as the nation seeks to increase its daily production levels.
The crude oil production for the month at 1.25 million bpd represents the 5th consecutive time Nigeria will fail to produce oil that meets its OPEC production quota or 2024 budget benchmark thereby reducing projected revenue.
However, the country can take consolation in increased crude oil prices above the 2024 budget benchmark of $78 per barrel.
However, declining crude oil production means reduced earnings from oil sales as the country seeks to boost its revenue base.
Another downside to declining oil production is the continued reduction in Nigeria’s OPEC quota. In 2023, the country significantly fell short of its OPEC production quota of 1.7 million bpd which saw the oil cartel reduce it to 1.5 million bpd for 2024.
Just recently, OPEC+ at its Joint Ministerial Monitoring Committee (JMCC) meeting pegged Nigeria’s crude oil production quota at 1.5 million barrels for 2025 despite the country targeting a 2 million bpd crude oil production.
