Nigeria produced more oil than its 2019 budget assumption of 2.3 million, as it registered an output of 2.386 million barrels of oil daily in August 2019, according to the International Energy Agency.
The Paris-based global energy body said Africa’s largest oil producer overstepped the Organisation of Petroleum Exporting Countries (OPEC) Plus commitment of 1.786 million barrels per day it agreed to in December 2018 by 600,000 barrels per day.
Saudi Arabia remains the cornerstone of the deal, as it produced 600,000 fewer barrels per day than its production quota, IEA said in its monthly ‘Oil Market Report’ for September.
“Major countries Russia, Nigeria and Iraq, produced 0.6 million barrels per day more than their allocations. Saudi Arabia, on the other hand, produced 0.6 million barrels per day less than allowed and it is clearly the lynchpin of the whole deal,” it noted.
The agency also warned that the OPEC Plus alliance, which is a pact between OPEC member states and ten other oil producers led by Russia, will struggle with increased production from petroleum generating countries outside the coalition.
OPEC predicted it would lead to a glut in the market which will translate to downward pressure on the price of a barrel of oil.
The IEA further predicted that demand for Nigeria’s and by extension OPEC Plus’s oil will reduce to 28.3m BPD in the first half of 2020.
This figure is 1.4 million less than the 29.7 million barrels per day OPEC produced in August 2019.
The body also observed that the OPEC plus compliance rate was down to 116 percent, an indication that countries are looking for new markets to satisfy.
The USA which outstripped Saudi Arabia as the largest oil producer momentarily in June, as well as Brazil and Norway, will be responsible for much of the weakened demand for petroleum from OPEC Plus in the first half of 2020, according to IEA.