Nigeria’s crude oil production has hit one-year high, according to a report released by the Organisation of Petroleum Exporting Countries (OPEC).
The report attributed the increased production output to the resumption of loadings at Forcados terminal in Delta State.
After militants attacked the pipeline terminal in February 2016, Shell declared force majeure, a legal clause that allows it to stop shipments at the terminal without breaching contracts.
According to the report, OPEC crude oil production increased by 336 thousand barrels per day (tb/d) with outputs increasing the most in Libya, Nigeria and Iraq.
“According to secondary sources, OPEC crude oil production in May increased by 336 tb/d from the previous month to average 32.14 mb/d. Crude oil output increased the most in Libya, Nigeria and Iraq, while production in Angola and UAE showed the largest declines,” the report read.
“Rising output from Nigeria, Libya and the North Sea kept the Atlantic basin well supplied with light sweet crude, weighing on crude values. Nigerian crude production rose to 1.68 mb/d, the highest level in more than one year. This followed the restart of Forcados loadings for the first time since October 2016.”
OPEC said oil prices dropped at the beginning of May because increased production from Libya, Nigeria and US raised worries about excess supply.
“Oil prices edged down earlier in the month as a recovery in Libyan and Nigerian output and rising US supplies raised worries about excess supply,” the report read.
“Oil has been weighed down by the market’s impatience with the generally slow pace of the inventory draw down globally, even after major oil producing countries decided at the end of 2016 to reduce oil production by around 1.8 mb/d in the first half of 2017.
“Oil prices plunged further to five-month lows amid record trading volumes, as major oil producers ruled out deeper production adjustments.”
During the 172nd OPEC meeting in Vienna, Ibe Kachikwu, Minister of State for Petroleum Resources, said if production reached the catch point for cuts, it was likely for Nigeria to join other countries in the OPEC production cut.