KEY POINTS
- Nigeria, Libya and Venezuela record production declines, dragging OPEC+ performance
- Crude prices slip as stronger dollar and higher US inventories weigh on sentiment
- OPEC+ to pause output increases after December amid weak global demand
Nigeria’s crude oil output fell again in October, adding to production setbacks in Libya and Venezuela that weakened the Organisation of the Petroleum Exporting Countries and its allies, OPEC, in meeting collective output targets. The decline highlights persistent supply constraints across several member states, even as the group struggles to stabilise prices in a slowing global economy.
Data from OPEC’s October Monthly Oil Market Report showed that Nigeria’s production, which briefly reached 1.5 million barrels per day in July, dropped to about 1.3 million barrels by September, eroding gains made earlier in the year. According to Reuters, OPEC’s total output in October rose by a modest 30,000 barrels per day, far below September’s 330,000 bpd increase.
Bayo Ojulari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, attributed Nigeria’s output decline to labour unrest involving the Dangote Refinery and unions representing oil and gas workers. The dispute has disrupted supply operations and compounded challenges posed by crude theft and ageing infrastructure.
Global Prices Weaken as Supply Risks Mount
Oil prices slipped further on Wednesday as global market uncertainty and a stronger US dollar dampened investor sentiment. Brent crude futures traded at $64.38 per barrel, down 6 cents, while US West Texas Intermediate dropped 10 cents to $60.46. The OPEC Basket declined by nearly 0.4 percent to $66.72.
Market analysts said rising US crude inventories and a general “risk-off” mood among investors had pressured prices. Tony Sycamore, an analyst at IG Markets, noted that the stronger dollar and concerns over demand recovery had driven traders to safe-haven assets, pushing energy prices lower.
The American Petroleum Institute reported an increase in US stockpiles for the week ending October 31, adding to oversupply concerns. Meanwhile, OPEC announced plans to boost output by 137,000 bpd in December before pausing further increases through the first quarter of 2026.
Analysts at LSEG, however, said the pause was unlikely to support prices significantly, citing weaker global consumption and sluggish refinery demand across Asia and Europe.
The production slump underscores the fragile balance within OPEC+, where underperforming members are offsetting gains made by Gulf producers. For Nigeria, the decline also threatens vital revenue inflows, complicating fiscal planning as the government grapples with inflation, subsidy reforms, and a weakening naira.
