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Recession: Nigeria Records Biggest Crude Oil Losses in August

First Bank Nigeria

The economic slide took a new turn with reports that Nigeria recorded the biggest crude oil loses among its peers in the Organisation of Petroleum Exporting Countries (OPEC) in August.

This is set to impede the gains of recent months that saw an upward movement in output and national revenues as a result a decline in the disruptive activities of pipeline vandals,Punch writes.

Nigeria had in March lost the status of Africa’s top oil producer to Angola when the country’s production dropped to 1.677 million barrels per day, compared to Angola’s 1.782 million bpd.

However, OPEC’s Monthly Oil Market Report for September showed that Nigeria’s oil output fell to 1.468 million bpd in August from 1.52 million bpd in July, which has been the country’s biggest jump in output although it wasn’t enough to help the country regain the top spot from Angola.

This decline also reflects the general performance of the cartel as OPEC crude oil production stood at 33.24 million bpd in August, a decrease of 23,000 bpd from the previous month.

“Crude oil output increased mainly from Saudi Arabia and Iran, while Nigeria and Libya showed the largest drop,” OPEC said in a report.

Meanwhile, the crude market is expected to further contract as OPEC raised its forecast of oil supplies from non-member countries in 2017 with the sprouting of new fields, particularly the United States’ shale drillers, pointing to a larger surplus in the market next year.

Demand for crude from OPEC will average 32.48 million bpd in 2017, down by 530,000 bpd from the previous forecast, and this may put further strain on the current price of $47 a barrel.

Nigeria’s Vice-President Yemi Osinbajo has blamed the current economic recession on a decline in national revenues occasioned by restiveness in the oil-rich Niger Delta region, although the government has taken steps to contain the activities of militants and pipeline vandals.

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