Nigeria's Oil Production Hits Highest Volume in 12 Months

  • Nigeria's Oil Production Hits Highest Volume in 12 Months

Nigeria's Oil Production Hits Highest Volume in 12 Months

The U.S. Energy Information Agency published a weekly report Wednesday showing gasoline inventories unexpectedly surged by 2.1 million barrels. It predicts that output will grow even faster next year, by 1.5 million barrels daily, "which is slightly more than the expected increase in global demand".

"For total non-OPEC production, we expect production to growby 700,000 bpd this year, but our first outlook for 2018 makessobering reading for those producers looking to restrainsupply", the IEA said.

In November past year, when OPEC members agreed to cut production for the first time since the Great Recession, it was welcomed with great optimism and oil price jumped more than 20 percent, from $45 per barrel to as high as $55 per barrel (WTI).

Oil prices tumbled to the lowest level in seven months Wednesday, as high oil inventories continued to erode confidence in the ability of major producers to ease a global supply glut, the Wall Street Journal reports.

Brent crude oil fell 30 cents to $46.70 a barrel, its weakest since May 5 and just above six-month lows, before recovering a little to trade around $46.90 by 1345 GMT.

USA crude inventories rose 2.753 million barrels at the end of last week, the American Petroleum Institute (API) said on Tuesday, well above the 2.739 million barrels decline expected. The producer group said this week its output rose by 336,000 bpd in May to 32.14 million bpd.

A surprise build in United States gasoline inventories pressured oil prices on June 14, 2017.

The dollar rose to its highest in more than two weeks, further weighing on oil by making it more expensive for buyers using other currencies.

Prices have fallen ~12.8% since OPEC's successful meeting on May 25, 2017.

"Demand is not as strong as expected and supply continues to increase despite softer prices", said Michael McCarthy, a chief market strategist at CMC Markets in Sydney.

Despite the deal, some Opec members, including Nigeria and Libya, have been exempt from cutting, and their rising output is seen to be undermining efforts led by Saudi Arabia.

The forecast for USA total oil production for 2017 has been revised 90,000 bpd higher, to average 13.1 million bpd, following further rig additions and increased spending.

"We need to see a sign that the Opec cuts are having an impact on world oil supplies and it's clearly not, at least not yet", said Tamar Essner, lead energy analyst at Nasdaq.

The OPEC production figures were for 13 members and did not include Equatorial Guinea, which joined last month. However, continuing production growth in many non-OPEC countries is expected to moderate the pace of global liquid fuels inventory draws in 2017.