OPEC+ assigns Nigeria 1.718 mbd output in March
Keeps production rate in lane
Sopuruchi Onwuka
Nigeria is to pump her crude oil grades to the international markets at daily rate of 1.718 million barrels (1.718 mbd) in March, according to the new production quota released by the 23 member coalition which held a meeting Wednesday.
Against high expectations that the world’s group of petroleum producers would loosen the prevailing tight supplies to soften prices in the oil export markets, the Organization of Petroleum Exporting Countries (OPEC) and its 10 non-member allies decided on Wednesday to stay in the lane for gradual increment by 400,000 barrels per day.
Nigeria is one of the key members of the 10 accountable OPEC bloc of producers which is expected to produce a total 25.061 mbd to global supplies in the month. The non-OPEC bloc led by Russia is supposed to offer the market some 16.233 mbd in the month. The OPEC+ coalition will collectively produce at the rate of 41.294 mbd in March.
OPEC and allies (OPEC+) declared that the group would increase collective production in March according to its determined staggered and measured response to market demand, but analysts in developed countries think that a $90 per barrels price is sufficient call for more volumes.
The 23 member coalition said in a statement after its virtual ministerial conference that the decision was made “in view of current oil market fundamentals and the consensus on the outlook”.
Some of the analysts who share sentiments with energy watch dogs for the Organization of Economic Cooperation and Development (OECD) point at recent rally in oil prices to $90 per barrel as hurtful to major energy intensive industrialized economies like Japan, North America and Europe.
Industry consultancy firm, Goldman Sachs had predicted that OPEC+ would deliberately pump more to address the concerns of major oil importers about high prices.
Brent Crude prices returned to $90 per barrel just after news of the modest production increase and the record-short meeting broke.
Analysts also point at inability of some members of the group to meet their production quotas as a major factor in the prevailing supply crisis, and others see capacity limits as the key reason why OPEC+ plus has decides to maintain measured steps.
In December, the total volume of OPEC+ output increased by only 90,000 barrels per day, far short of the 400,000 target, according to a survey by the Bloomberg news agency.
Commodities expert at Capital Economics, Edward Gardner, said the decision rigidly followed the group’s approach since it was first agreed upon, even in December when oil prices plunged following the emergence of Omicron,” said
“What matters going forward is whether OPEC+ can keep up with its planned production increases,” he said.
OPEC undershot its promised output boost in January, and analysts begin to accept underperformance in the group as a pattern that inadvertently supports strong oil prices.
The new production quota for March affords Saudi Arabia and Russia equal output volumes at 10.331 million bpd each, nearly half of the total supply from the bloc.
The next OPEC+ meeting is scheduled for March 2.
