OPEC increases oil production as Nigeria boosts output

(Bloomberg) – OPEC’s oil production increased last month as Nigeria extended its recovery ahead of presidential elections.

The Organization of Petroleum Exporting Countries boosted supplies by 120,000 bpd to 29.24 MMbpd, with the West African nation accounting for two-thirds of the increase as its output reached a one-year high, according to a Bloomberg survey.

Nigeria has revived production from record lows this year after the government reached a deal with security companies linked to Government Ekpemupolo, a onetime warlord in the oil-producing Niger River delta region. It pumped 1.44 MMbpd in February, the survey showed.

Other OPEC members largely held output steady, as the group adhered to quotas fixed late last year to keep global crude markets in balance amid a fragile recovery in demand. Group leader Saudi Arabia has pledged that the targets will remain in place until the end of 2023.

Oil consumption is projected to climb and boost prices later this year as China’s economic reopening from anti-Covid lockdowns gathers pace. Yet concern over tightening U.S. monetary policy and the threat of recession is weighing on the market for the time being, instilling a sense of caution in Riyadh and its partners.

At the same time, OPEC nations are watching developments in Russia — part of a wider coalition known as OPEC+ — which has threatened to cut production in March in retaliation for western sanctions over the war in Ukraine. Russian output has so far held steady in the first months of 2023 despite widespread condemnation over the conflict.

Bloomberg’s survey is based on ship-tracking data, information from officials and estimates from consultants including Kpler Ltd., Rapidan Energy Group, and Rystad Energy.

The OPEC+ coalition is next due to hold an online monitoring session to review market conditions early next month, and to have a full in-person meeting at its Vienna headquarters in June.