Nigeria's Oil Production Declines for Second Straight Month

Nigeria's oil production has declined for the second consecutive month, falling by 0.3% to 1.50 million barrels per day in August from July. According to data from the Nigerian Upstream Petroleum Regulatory Commission, this marks a return to contraction after four months of growth.

Despite the decline, production remained aligned with Nigeria's OPEC quota of 1.50 mb/d for the fourth consecutive month. Condensate production increased by 7% to 178 kb/d, lifting total liquids production by 0.4% to 1.67 mb/d.

The monthly decline was driven by lower output at several terminals, including Escravos, Forcados, Brass, Erha, Bonga, Usan, Cawthorne, Nembe and Akpo. Year-to-date crude oil production averaged 1.64 mb/d, marginally below the 1.67 mb/d recorded in the same period last year.

With Bonny Light trading above US$120 per barrel, higher prices provide an important buffer against weaker-than-expected production. However, a ramp-up in crude oil production would enable Nigeria to capture greater value from the current rally in crude oil prices.