By Adedapo Adesanya
Another month of underproduction in Nigeria has led to a much shorter volume of crude oil output of the Organisation of the Petroleum Exporting Countries (OPEC) in April.
A Reuters survey showed that the bloc produced 28.58 million barrels per day last month and Nigeria, which is the largest producer in Africa, posted a decline of 40,000 barrels per day caused by a force majeure on the Bonny Light export stream.
By calculations, this means that OPEC’s 10 members under an output deal produced only 40,000 barrels per day more than in March.
The output deal called for a 254,000 barrels per day increase for OPEC countries and a 400,000 barrels per day increase overall for OPEC+ production for April. This suggests a shortfall of some 214,000 barrels per day for OPEC members.
In March, OPEC alone increased its combined production by just 57,000 barrels per day, of which 54,000 barrels per day came from Saudi Arabia.
The UAE also increased its production but the African members of the cartel saw their output decline during the month.
The biggest drop in output was in Libya, which at one point in April was losing more than 550,000 barrels per day from blockades on fields and terminals. However, the African producer is exempted from the deal.
From October 2021 through March 2022, OPEC output came in lower than the deal commitments, except for the month of February, the Reuters survey noted.
As a result, the 10 OPEC members are pumping far less than called for under the deal. OPEC compliance with pledged cuts was 164 per cent, the survey found, versus 151 per cent in March.
Set to meet on Thursday this week (May 5), the expectation is that the current deal is likely to be maintained for June at an increase from 400,000 to 432,000 barrels per day that was discussed in March.
Even a modest increase to 432,000 barrels per day could be in question as the cartel weighs the demand outlook amid China’s COVID lockdowns, which threaten downward pressure despite an energy shortage caused by Russia’s war on Ukraine.
