OPEC projects lower oil demand as Nigeria’s production stagnates at 1.4mbpd

The Organisation of Petroleum Exporting Countries (OPEC) yesterday lowered the demand forecast for crude oil amid tumbling prices as Nigeria pumped 1.4 million barrels of oil per day in October.

The monthly market outlook from the organisation revised the global oil demand growth forecast downward for both 2024 and 2025 even as analysts are worried of worse days ahead given the victory of Donald Trump as U.S. president.

OPEC now anticipates a demand increase of 1.82 million bpd in 2024, down from its previous estimate of 1.93 million bpd. Similarly, 2025 forecast has been reduced to 1.54 million bpd from an earlier estimate of 1.64 million bpd.

The Guardian had reported that Nigeria may fail to produce about 138 million barrels of crude oil worth $10.73 billion in 2024 despite the fact that President Bola Tinubu sets Nigeria’s N28 trillion 2024 budget on an unrealistic oil and gas outlook that has consistently failed in the last 10 years.

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, had stated that plus condensate, Nigeria’s oil production has moved to about 1.7 million, a figure which aligns with data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

With OPEC quoting 1.4 million bpd, it means Nigeria may be producing about 400 000 barrels of condensate.

Usually, condensates—lighter hydrocarbons is often excluded from OPEC’s production calculations—do not significantly alter the lower production figure reported by OPEC, which focuses solely on crude oil.

OPEC has attributed the adjustment in oil output to slower economic growth in major oil-consuming nations, including China and the United States, which have faced persistent challenges such as high inflation and geopolitical tensions.

Lower demand growth could impact oil prices, placing additional fiscal pressure on oil-dependent economies like Nigeria.

OPEC’s total crude oil output averaged 26.53 million bpd in October 2024, marking an increase of 466,000 bpd from September. Libya led this rise in production, benefiting from relative stability in its oil fields, which have experienced periodic disruptions in recent years. However, the uptick in OPEC production could contribute to global oversupply concerns, particularly if demand growth continues to slow as projected.