•Cartel cuts 2024, 2025 global oil demand growth again
Emmanuel Addeh in Abuja
Latest data from the Organisation of Petroleum Exporting Countries (OPEC) yesterday showed that Nigeria’s average daily crude oil production fell to 1.32 million barrels per day (bpd) in September 2024, despite recent efforts to ramp up output.
OPEC, in its monthly oil market report, said the production data was based on direct communication with Nigerian authorities, although quoting secondary sources, it disclosed that oil volume produced during the month was 1.4 million bpd.
OPEC stated that September’s output figure represented a 2.22 percent decrease from the 1.35 million bpd recorded in August.
Although the country retained its position as the biggest oil producer in Africa, followed by Algeria, which produced 908,000 bpd in the month under review, it nevertheless faced severe underproduction compared to the 1.58 million bpd quota handed down by OPEC.
According to the data Congo was the third-largest oil producer with 270,000 bpd in the month under consideration.
Notably, while crude oil output increased mainly in Iran and Kuwait, production in Libya, Iraq, Nigeria, and Saudi Arabia decreased, even as total non-OPEC crude oil production averaged 14.06 mb/d in September.
The monthly market data also saw OPEC cutting its forecast for global oil demand growth in 2024, reflecting data received so far this year and also lowered its projection for next year, marking the producer group’s third consecutive downward revision.
The weaker outlook highlights the dilemma faced by OPEC+, which comprises the OPEC countries and allies such as Russia, which is planning to start raising output in December after earlier delaying the hike against a backdrop of falling prices.
The monthly report said world oil demand will rise by 1.93 million barrels per day (bpd) in 2024, down from growth of 2.03 million bpd it expected last month. Until August, OPEC had kept the forecast unchanged since it was first made in July 2023, Reuters reported.
China accounted for the bulk of the 2024 downgrade. OPEC trimmed its Chinese growth forecast to 580,000 bpd from 650,000 bpd. While government stimulus measures will support fourth-quarter demand, oil use is facing headwinds from economic challenges and moves towards cleaner fuels, OPEC said.
Oil held an earlier decline of about 2 per cent after the report was issued, with Brent crude trading below $78 a barrel.
There is a wide split between forecasters on the strength of demand growth in 2024, partly due to differences over China and over the pace of the world’s switch to cleaner fuels. OPEC is still at the top of industry estimates and has a long way to go to match the International Energy Agency’s far lower view.
But OPEC said this year’s demand growth was still above the historical average of 1.4 million bpd seen prior to the COVID-19 pandemic, which caused a plunge in oil use.
For next year, OPEC cut its 2025 global demand growth estimate to 1.64 million bpd from 1.74 million bpd.
OPEC+ has implemented a series of output cuts since late 2022 to support the market, most of which are in place until the end of 2025.
The group was due to start unwinding the most recent layer of cuts of 2.2 million bpd from October, but decided to delay the plan for two months after oil prices slumped.
OPEC’s report showed production fell in September due to unrest in Libya and a cut by Iraq. OPEC+ pumped 40.1 million bpd, down 557,000 bpd from August. Iraq pumped 4.11 million bpd, down 155,000 bpd but still above its 4 million bpd quota.
As well as Iraq, OPEC has named Russia and Kazakhstan as among the OPEC+ countries which pumped above quotas.
Russia cut output in September by 28,000 bpd to about 9 million bpd, the report said, citing data from secondary sources such as consultancies. Kazakhstan, however, raised production by 75,000 bpd to 1.55 million bpd.
The OPEC report projects demand for OPEC+ crude, or crude from OPEC plus the allied countries working with it, at 43.7 million bpd in the fourth quarter, in theory allowing it room for higher production.