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Nigeria Commodities March 2024

Nigeria: Nigerian oil output falls in March; Brent prices rise

Brent crude oil prices averaged USD 84.96 per barrel in March, up 3.9% from February. On 29 March, the commodity traded at USD 87.42 per barrel, up 4.3% from 29 February. Supply cuts by OPEC+ and robust demand drove up prices.

Turning to production, Nigerian oil output fell to 1.40 million barrels per day (mbpd) in March from 1.44 mbpd in February. That said, it remained above 2023’s average level of 1.31 mbpd.

In other news, in April, the country released new regulations for the oil sector: Crude producers will be forced to sell their output to domestic refineries that are unable to obtain local supplies. Consequently, producers will only be able to export after meeting a domestic supply target. This policy aims to reduce the country’s dependence on fuel imports and is set to come into effect in the second half of 2024.

Our panelists see oil output rising for the second year in a row this year thanks to an improved security situation in the Niger Delta. Increasing output in the recently opened Dangote refinery should provide a further boost to the petroleum sector; the refinery is expected to turn Nigeria into a net exporter of fuels ahead after years of being almost entirely reliant on imports. Nonetheless, oil output will linger below both the 10-year average of 1.60 mbpd and the 1.50 mbpd OPEC+ target. A downside risk is renewed turmoil in the Niger Delta.

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