-By Fred Ojiegbe
For two months in a row, Nigeria has continued to experience improvement in oil production as its rig count improved by two, having recorded nine in September, as against eight recorded in August. Earlier in July, the rig count stood at six, data from the Organisation of Petroleum Exporting Countries, OPEC, showed.
This is happening at a time OPEC rig count decreased by 14, as it recorded 363 in September, as against 377 recorded in August, while global rig count reduced by 31, as it recorded 1,137 in September, as against 1,168 recorded in August. Saudi Arabia joined Nigeria in recording plus two in its rig count, as it posted 85 figure in September, as against 83 posted the previous month. Angola posted plus one, having recorded two in September, as against one recorded the previous month. Five OPEC members had minus in their rig count within the period under review.
Leading the group of losers was Algeria, which had minus eight, having recorded 22, as against 30 recorded within the period under review. Libya came second with its minus four, as it recorded nine in September, as against 13 recorded the previous month. The United Arab Emirates (UAE) tied with Libya at minus four, as its September rig count showed 47, as against 51 recorded in August. Kuwait also had its rig count reduced by two, having recorded 41 in September, as against 43 recorded in August, while Iraq had minus one, as it experienced a rig count of 28, as against 27 experienced within the period under review. Five out of the 13 – member countries of OPEC had their rig count unchanged within the period under review. They are Congo, Equatorial Guinea, Gabon, Iran and Venezuela, with 0, 1, 0, 117 and 1, respectively.
OPEC Crude Oil Production
Total OPEC-13 crude oil production averaged 24.11 million barrels daily, mb/d in September 2020, down by 0.05 mb/d month – on – month, m-o-m. Crude oil output inched up mainly in Libya, Iraq and Saudi Arabia, while production decreased primarily in the UAE.
World Oil Supply
Preliminary data indicates that global liquids production in September decreased by 0.06 mb/d to average 90.71 mb/d, compared with the previous month, and was lower by 7.83 mb/d, year – on – year, y-o-y. Non-OPEC liquids production (including OPEC non gas liquids, NGLs) decreased in September by 0.01 mb/d compared with the previous month to average 66.60 mb/d, lower by 3.75 mb/d y-o-y. The preliminary decreases in production during September 2020, were mainly driven by Brazil and Kazakhstan.
The share of OPEC crude oil in total global production remained unchanged in September at 26.6 percent compared with the previous month. Estimates are based on preliminary data from direct communication for non-OPEC supply, OPEC NGLs and non-conventional oil, while estimates for OPEC crude production are based on secondary sources.
World Oil Demand
According to OPEC data, the world oil demand forecast for 2021 was adjusted lower by 0.08 million barrels per day, mb/d compared to the previous month’s report. This downward adjustment is due to the slower economic growth projected for both the Organisation for Economic Co-operation and Development, OECD and non OECD.
Nevertheless, the forecast for oil demand growth stands at around a solid 6.5 mb/d, with global total demand estimated to reach 96.8 mb/d. While the demand forecast expects growth of 4.6 percent in global economic activity, risks related to the COVID-19 pandemic and its impact remain a considerable concern. The OPEC data also stated that in terms of products, light distillates (including LPG/NGL/naphtha) and diesel are expected to be supported by improving industrial activity and capacity additions in the petrochemical sector, mainly in China and the US next year. All products are projected to see growth, given the current year’s low demand levels. On the other hand, oil demand growth in 2021 is expected to be capped by a number of factors, including the increase in tele-working and distance education; reduced international business and leisure travel; efficiency gains in the transportation sector; oil substitution policies in power generation; and reduced fuel subsidies.