By Adedapo Adesanya

The oil market depreciated on Friday as analysts projected a supply surplus next year on weak demand despite the decision by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) to delay output hikes and extend deep production cuts to the end of 2026.

During the session, Brent crude futures shed 97 cents or 1.4 per cent to trade at $71.12 per barrel and the US West Texas Intermediate (WTI) crude futures lost $1.10 or 1.6 per cent to close at $67.20 a barrel.

For the week, Brent lost more than 2.5 per cent while WTI saw a drop of 1.2 per cent.

OPEC+ pushed back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026.

Weak global oil demand and the prospect of OPEC+ ramping up production as soon as prices rise have weighed on trading.

The alliance had already postponed twice the beginning of the output increase. January 2025 was set as the point from which producers would begin to add supply, but that has since changed due to a slowdown in global demand – especially from top crude importer China.

OPEC+, which is responsible for 50 per cent of the world’s supply, will also face competition from rising output elsewhere, which has forced it to postpone the plan several times.

On Friday, Saudi Energy Minister, Prince Abdulaziz bin Salman said that the primary reason for OPEC’s deferral of the production increase to the start of the second quarter is that the first quarter in any year is a weak consumption period.

“The first quarter is not a good quarter to bring volumes,” Abdulaziz bin Salman said. “That quarter is known to be a quarter for building stocks.”

The deferral, while primarily motivated by fundamentals, would give OPEC+ a better view of China’s growth, Europe’s growth, US policy, interest rates, and inflation in key developed markets.

Bank of America forecast that increasing oil surpluses will drive the price of Brent to an average of $65 a barrel in 2025, while oil demand growth will rebound to 1 million barrels per day next year, the bank said in a note on Friday.

Also in a note, HSBC expects a smaller oil market surplus of 0.2 million barrels per day, from 0.5 million barrels per day previously.

Brent has largely stayed in a tight range of $70-$75 per barrel in the past month, as investors weighed weak demand signals in China and heightened geopolitical risk in the Middle East.

By Adedapo Adesanya

Nigeria recorded another positive trade balance in the third quarter of 2024, growing 43.6 per cent as the country’s total merchandise trade stood at N35.2 trillion.

A positive trade balance (surplus) occurs when there is a higher export value than import as it stood at N5.8 trillion, in the period under review.

This represents an increase of 81.4 per cent compared to the value recorded in the corresponding period of 2023 and a rise of 13.3 per cent over the value recorded in the preceding quarter.

In the quarter under review, exports accounted for 58.3 per cent of total trade with a value of N20.5 trillion, showing an increase of 98 per cent over the value recorded in the third quarter of 2023 at N10.4 trillion and 16.8 per cent compared to the value recorded in Q2 2024 at N17.5 trillion.

Nigeria’s export trade continued to be dominated by crude oil exports.

In the third quarter of 2024, crude oil export was valued at N13.4 trillion representing 65.4 per cent of total exports while the value of non-crude oil exports stood at N7.1 trillion accounting for 34.6 per cent of total exports; of which non-oil products contributed N2.5 trillion or 12.2 per cent of total exports.

On the other hand, the share of imports accounted for 41.7 per cent of total trade in the third quarter of 2024 with the value of imports amounting to N14.5 trillion in Q3, 2024.

This value indicates an increase of 62.3 per cent compared to the value recorded in Q3 2023 (N9.0 trillion) and 8.7 per cent over the value recorded in Q2 2024 (N13.5 trillion).

China remains Nigeria’s highest trading partner on the import side in the third quarter of 2024, followed by India, Belgium, United States of America, and Malta.

The most traded commodities imported during the quarter were Motor spirit ordinary, Gas oil, Durum wheat, Cane sugar meant for sugar refinery and used vehicles, with diesel or semidiesel engines, of cylinder capacity >2500cc.

The top five trading export partners were Spain, the United States of America, France, the Netherlands and Italy.

The most exported commodities included crude oil, liquefied natural gas, other petroleum gases in a gaseous state, Floating or submersible drilling or production platforms, and superior-quality Cocoa beans.

By Adedapo Adesanya

Nigeria’s daily oil production quota will remain unchanged at 1.5 million barrels per day after the Organisation of Petroleum Exporting Countries and its allies (OPEC+) on Thursday deferred the commencement of its proposed oil production cuts by a year, until the end of 2026.

The move was necessitated by weak demand and rising output by non-members of the international oil cartel.

OPEC sets a production target for its members as a way of curbing oversupply and ensuring price stability.

The alliance agreed to extend the 2 million barrels per day and the 1.65 million barrels per day of cuts until the end of 2026 from the end of 2025 respectively, according to statements issued by the group on Thursday.

However, Nigeria which has been a laggard struggled for years to meet its monthly allocation of 1.78 million barrels per day minus condensates as prescribed by the group.

The country quota was revised then downwards to 1.5 million barrels per day in 2022.

Under its formal output strategy, the broader OPEC+ coalition is now restricting its combined production to 39.725 million barrels per day until December 31, 2026, after previously only applying this quota throughout 2025.

However, eight OPEC+ members — Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman — will now extend their 2.2 million barrels per day voluntary production decline into the first quarter, and will begin hiking production incrementally between April and September 2026.

Nigeria, unable to meet its 1.5 million barrels per day, does not belong to this exclusive group. OPEC data puts Africa’s largest oil producer numbers at 1.3 million barrels on average.

Saudi Arabia’s quota will stand at 10.47 million barrels per day; Russia’s at 9.94 million barrels per day; Iraq’s at 4.43 million barrels per day production and Algeria’s at 1 million barrels per day output.

Despite these sets of production trims and ongoing conflict threatening the hydrocarbon-rich Middle Eastern region, global oil prices have remained subdued for the better part of this year, under pressure from a tepid demand outlook.

Brent crude, which Nigeria leverages its headline crude against, is currently trading at $72 per barrel.

Meanwhile, Nigeria has set an ambitious 2025 production target of 2.06 million barrels per day, inclusive of condensates, as outlined in the draft 2025 appropriation bill of N48.7 trillion. The bill also sets a $77 per barrel benchmark to fund the budget.