Nigeria’s crude oil output fell to 1.32 million barrels per day (bpd) in September 2024, according to data released by the Organisation of Petroleum Exporting Countries (OPEC). This drop comes despite ongoing efforts by the federal government to boost production.
The latest figures from OPEC’s monthly oil market report, based on direct communication with Nigeria, revealed a 2.22% decline from August’s production of 1.35 million bpd. However, secondary sources cited by OPEC indicated a slightly higher output of 1.4 million bpd for the same period.
Despite retaining its position as Africa’s leading oil producer, with Algeria following at 908,000 bpd, Nigeria continues to grapple with significant underproduction. The country fell short of its OPEC-assigned quota of 1.58 million bpd. Congo ranked third in Africa, producing 270,000 bpd during September.
Crude production also declined across other key OPEC nations, including Libya, Iraq, and Saudi Arabia. In contrast, countries like Iran and Kuwait saw output gains. Overall, total non-OPEC production averaged 14.06 million bpd during September.
OPEC also cut its global oil demand growth forecast for 2024, citing weaker than expected economic data and ongoing transitions to cleaner energy sources. The organisation now anticipates demand growth of 1.93 million bpd, down from the previous month’s forecast of 2.03 million bpd. This marks the third consecutive downward revision of the group’s outlook.
China, a significant player in global oil demand, accounted for a large portion of the downgrade. OPEC reduced its growth estimate for Chinese demand to 580,000 bpd from 650,000 bpd. Although government stimulus measures are expected to support demand in the fourth quarter, the country’s economic challenges and its gradual shift towards cleaner energy sources present significant obstacles, according to OPEC.
Following the report’s release, Brent crude fell by about 2%, trading below $78 per barrel. This decline highlights the ongoing uncertainty within the global oil market, with forecasters divided on the strength of demand growth in 2024. Much of the discrepancy hinges on differing expectations for China’s recovery and the pace of the global transition to cleaner fuels. While OPEC remains at the upper end of industry estimates, it still trails behind the more conservative projections of the International Energy Agency (IEA).
Despite the downward revisions, OPEC noted that oil demand growth this year remains above the pre-COVID-19 historical average of 1.4 million bpd. However, the group also revised its 2025 forecast, trimming expected demand growth to 1.64 million bpd from 1.74 million bpd.
OPEC+ which includes OPEC members and allies like Russia as enacted a series of production cuts since late 2022 to stabilise prices, many of which will remain in place until the end of 2025. The group had planned to start reversing the most recent cuts, totalling 2.2 million bpd, in October, but delayed the move by two months following a sharp drop in prices.
September’s output decline was largely attributed to unrest in Libya and cuts by Iraq. OPEC+ collectively produced 40.1 million bpd in September, a decrease of 557,000 bpd from August. Iraq’s output dropped by 155,000 bpd to 4.11 million bpd, still above its OPEC quota of 4 million bpd.
Russia, which cut its production by 28,000 bpd to 9 million bpd in September, also remained a key focus. Kazakhstan, in contrast, increased its production by 75,000 bpd to 1.55 million bpd, reflecting the varied approaches within the OPEC+ alliance.
Looking ahead, OPEC projects demand for OPEC+ crude to average 43.7 million bpd in the fourth quarter of 2024, theoretically allowing room for increased output. However, with ongoing market volatility and a broad shift toward renewable energy sources, the future of global oil production remains uncertain.
