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Nigeria Commodities April 2024

Nigeria: Nigerian oil output declines in April

Brent crude oil prices averaged USD 88.97 per barrel in April, up 4.7% from March. On 30 April, the commodity traded at USD 87.91 per barrel, up 0.6% from 29 March. Rising tensions between Iran and Israel pushed up prices.

Turning to production, Nigerian oil output fell to 1.35 million barrels per day (mbpd) in April from 1.40 mbpd in March, below the 10-year average of 1.60 mbpd but above 2023’s average level of 1.31 mbpd.

In other news, in early May, the country announced a new oil and gas licensing round for 12 onshore and offshore blocks. The authorities vowed to conduct the process in a fair and transparent manner—the lack of transparency is a key factor behind the divestment of major international players.

Our Consensus is for oil production to rise for the second year running in 2024, thanks to an improved security situation in the Niger Delta. Moreover, increasing output in the recently opened Dangote refinery is set to enhance petroleum sector output further; after years of being almost entirely reliant on imports, the refinery should turn Nigeria into a net exporter of fuels ahead. That said, oil output will remain under both the 10-year average of 1.60 mbpd and the 1.50 mbdp OPEC+ target. Renewed disruptions in the Niger Delta pose a key downside risk.

Pieter Scribante, analyst at Oxford Economics, said:

“Recovering oil output and producing more expensive refined petroleum products are boons to the hydrocarbon sector and the broader economy, buoying the external balances, supporting the fiscus, and bolstering domestic industries.”

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