KEY POINTS
- Nigeria led OPEC with 1.797 million barrels per day in December 2018, up from 1.579 million bpd in November.
- Oil prices dropped over 3% as China’s economic slowdown raised fears of declining global demand.
- Nigeria spent N2.39 trillion importing petroleum in the first three quarters of 2018, marking a 13% year-on-year increase.
Nigeria emerged as the highest crude oil producer among members of the Organisation of Petroleum Exporting Countries, OPEC, in December 2018, pumping 1.797 million barrels per day (bpd). This figure marked a significant increase from the 1.579 million bpd the country produced in November of the same year.
According to OPEC’s Monthly Oil Market Report released in January 2019, “Nigeria’s oil output, as recorded by secondary sources, climbed to 1.750 million bpd in December from 1.739 million bpd in November.”
Other OPEC members also experienced changes in their production levels. Kuwait raised its output by 72,000 barrels, reaching 2.803 million bpd.
Venezuela, despite ongoing internal challenges, managed an increase of 47,000 barrels to produce 1.511 million bpd. Angola, the second-largest African producer after Nigeria, increased its output by 28,000 barrels to 1.445 million bpd. Iraq’s production went up by 10,000 barrels to hit 4.465 million bpd.
However, OPEC’s collective crude oil production for December averaged 31.58 million bpd—registering a drop of 751,000 bpd from the previous month. This reduction was largely attributed to declines in output from Saudi Arabia, Libya, Iran, and the United Arab Emirates.
Oil prices drop as China’s economic slowdown fuels fears of weakening demand
In another development that rattled the global oil market, crude prices dropped significantly on Tuesday following renewed concerns over a slowing Chinese economy.
Investors feared a decline in energy demand as China—the world’s second-largest economy and top oil importer—announced its slowest annual growth rate in nearly three decades.
CNBC reported that the economic gloom from China sent shockwaves through Asian financial markets. By 10:08 a.m. ET (1508 GMT), Brent crude futures had fallen by $1.97, or 3.1 percent, to trade at $60.77 per barrel. West Texas Intermediate (WTI) crude slipped by $1.78, or 3.3 percent, to $52.02 per barrel.
“Falling factory orders in China suggest deeper cuts in activity and potentially more job losses,” the country’s state planner warned. Although Chinese oil imports surpassed 10 million bpd in late 2018, many analysts believe that “China may have already peaked in energy growth, with demand expected to slow in the coming years.”
The International Monetary Fund (IMF) also painted a sobering picture of the global economy. On Monday, it revised its 2019 global growth forecast downward to 3.5 percent, compared to the 3.7 percent projection made in October 2018. “Does that mean a global recession is around the corner? No,” IMF Managing Director Christine Lagarde told reporters at the World Economic Forum in Davos. “But the risk of a sharper decline in global growth has certainly increased.”
On the domestic front, Nigeria’s reliance on petroleum imports continues to strain its economy. According to the National Bureau of Statistics (NBS), Nigeria spent N2.39 trillion to import 17 billion litres of petroleum products during the first three quarters of 2018. This represents a 13 percent increase over the N2.09 trillion spent in the same period in 2017.
