A BMI Research report has said that while Nigeria’s recovery in terms of crude oil production is close to reaching its full potential, further gains are however threatened by the country’s inclusion in the OPEC production cut agenda, Independent reports.
BMI Research, a unit of Fitch Group, has premised its 2017 forecast on a bounce back in production and could remain unchanged at 2.14 million barrels per day, including condensate. Nigeria’s production recovery combined with stronger production from Libya has put pressure on the OPEC output cut, undermining its effectiveness. The Nigerian Oil Minister, Emmanuel Ibe Kachikwu announced that crude production for July was just shy of 1.8 million barrels per day (b/d). Condensate production is also performing well with output standing at 450,000 b/d in July according Dr. Kachikwu.
The report said due to the stabilising output from both countries it is a rising possibility that one or both will be asked to participate in the effort to rebalance the oil market. According to the report, a cap on output is more likely than a cut and given the fact both countries are encroaching on upper levels of achievable production, this will be palatable. Incorporating the two African countries into the agreement would also ease market worries about further output growth from the two OPEC nations, it added.topics from