Unless Nigeria is able to ramp up its production in the current month, the country would be unable to maximum the current rise in crude oil prices in the international market.
Oil prices rose for the third week in a row to a near three-year high on Friday with the Brent crude futures rising to above $78 a barrel, the highest since October 2018.
Also, WTI crude rose for the fifth consecutive week, with futures up almost three per cent to an 8-week high of $73.98 a barrel boosted by growing fuel demand and falling US crude inventories.
The rally in oil prices should come as good news for oil producing countries such as Nigeria, that relies on crude oil sales for over 90 per cent of its foreign exchange earnings, boost the nation’s revenue needed for the implementation of the 2021 budget — improve crude oil receipts — consequently bolster foreign exchange inflows.
However, if Nigeria’s crude oil production output do not rise above the average of 1.23 million barrels per day recorded in August, the lowest figure recorded yet in 2021, the country will not be able to improve its revenues.
The 2021 crude oil and condensate production figures by the Department of Petroleum Resources (DPR) had showed that Nigeria’s crude fell from an average 1.36 million barrels per day in January to 1.23 million b/d in August, representing a 9 percent decline.
Oil prices rose following disruptions in US Gulf Coast production following Hurricane Ida and other storms have led to sharp draws in US and global inventories.
EIA data showed US crude stocks fell by 3.5 million barrels to 414 million last week, the lowest since October 2018. Capping some gains was China’s first public sale of state oil reserves. State-owned PetroChina and private refiner and chemical producer Hengli Petrochemical bought four cargoes totaling about 4.43 million barrels