Nigeria: Nigerian oil output and Brent prices rise in February
Brent crude oil prices averaged USD 81.80 per barrel in February, up 3.4% from January. On 29 February, the commodity traded at USD 83.78 per barrel, up 2.3% from 31 January. Prices rose as OPEC+ continued to cut its production and tensions in the Middle East remained inflamed.
Turning to production, Nigerian oil output rose to 1.48 million barrels per day (mbpd) in February from 1.43 mbpd in January, marking the joint-highest level of production together with February 2021 since June 2020.
In other news, in early March, the government announced that it would offer tax credits and simplify contracting procedures for oil and gas investments in the country. This aims to attract foreign investment in the on-shore energy sector after the exits of several international players like TotalEnergies and Shell in recent months.
Oil production is seen rising for the second consecutive year in 2024, thanks to an improved security situation in the Niger Delta. Higher output in the recently opened Dangote refinery should provide a further boost; the refinery is expected to turn Nigeria into a net exporter of fuels ahead after years of being almost completely reliant on imports. That said, output will remain below both the 10-year average of 1.60 mbpd and the 1.50 mbpd OPEC+ target. Renewed turmoil in the Niger Delta poses a downside risk.