Financial analysts have said that the nation’s foreign exchange reserves which increased by 0.80 per cent to $24.97 billion was due to rallying global crude oil prices. OPEC’s reference basket price increased week-on-week by 1.54 per cent to $50.04 a barrel while ICE Brent crude oil price rose by 0.52 per cent to $53.98 a barrel . The recent positive movement in global oil prices followed recent agreement by the Organisation for Petroleum Exporting Countries (OPEC) to implement a new production target of 32.5 million barrels per day in order to speed up the ongoing reduction of excess stockpiles. Under that plan, OPEC will, for six months, cut 1.2 million bpd from its October output level of 33.64 million bpd, as calculated by an average of OPEC’s six secondary sources. The output target is about 4.02 per cent lower than 33.86 million bpd output estimated in November by S&P Global Platts survey. Nigeria, however, saw its production remain at 1.68 million bpd in November due to the loss of production of key export grade Forcados owing to pipeline attack in early November, but which was offset by increased exports of other grades.
Traders expect Forcados production to remain offline in the mean time, with no indications of a loading program even in January 2017. The rally in global oil prices also comes ahead of upcoming meeting between OPEC and fourteen non-OPEC member countries
on Saturday, 10 December 2016 in Vienna, Austria, to finalise the global oil output-limiting agreement
which could help support prices. There are indications, however, that many OPEC members appear to be pumping at or close to their full capacity to maximize revenues before the OPEC deal goes into force on January 01, 2017. Meanwhile, ahead of the conclusion of Nigeria’s crude oil term lifting contracts for 2017 which will be decided by mid-December, there already exists potential for increased demand for Nigeria’s crude, particularly from India, which with a GDP growth rate of 7.5 per cent , is currently the world’s fastest growing economy and the biggest consumer of the commodity. Reports had it that some Indian companies were looking to purchase a combined total of 11 million metric tonnes (MT) in 2017 or about 80.6 million barrels from Nigeria, higher than 9 million (MT) or about 65.9 million barrels in 2016. Nigeria’s crude oil term contracts involve the export of around 1.17 million bpd of Nigerian crude, out of the 2.2 million bpd the she is capable of producing currently.
