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Nigeria Commodities January 2024

Nigeria: Nigerian oil output stable in January; Brent prices rise

Brent crude oil prices averaged USD 79.11 per barrel in January, up 2.0% from December. On 31 January, the commodity traded at USD 81.93 per barrel, up 5.5% from 29 December. Robust activity in the U.S. and stimulus in China boosted demand for oil in recent weeks.

Turning to production, Nigerian oil output was stable at December’s 1.42 million barrels per day (mbpd) in January, thus marking the joint-highest level of production since April 2021.

In other news, in early February, French energy company TotalEnergies started production at the Akpo West offshore field. That said, the firm announced its intent to divest from its on-shore oil positions in the country. This follows Shell’s exit from Nigeria’s on-shore oil sector in January and reflects international oil companies’ pivots toward only operating offshore fields in the country.

Oil output is forecast to increase for the second successive year in 2024, thanks to increased security in the Niger Delta. Rising production 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, our panelists forecast oil production to average below the 1.50 mbpd OPEC+ target. Renewed turmoil in the Niger Delta remains the key downside risk to the outlook.

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