-By Fred Ojiegbe
Nigeria made an impressive plus two record, in its rig count in August, having posted eight, as against six posted in July, at a time the Organisation of Petroleum Exporting Countries, OPEC recorded a dismal minus 15, as its August record which showed 377, as against 392 posted in July, latest data from OPEC shows.
World rig count improved by 19, as the record for the month of August stood at 1,168 against 1,149 recorded in July.
Among the 13 OPEC members, Libya was the only country that equalled Nigeria’s plus two record, as its August rig count stood at 13 as against 11 recorded the previous month. Angola completed the group that made improvement having recorded one in August as against none recorded the previous month. Saudi Arabia, the biggest OPEC producer led the loser’s group with its minus nine, having posted a record of 83 in August, as against 92 posted the previous month. It was followed by Kuwait, which had minus six, as its August record showed 43, against 49 recorded the previous month.
Iraq had its reduction by three, as its record showed 29, as against 32 posted within the period under review. It was closely followed by the United Arab Emirates (UAE), which had its reduction by two, as its record showed 51, as against 53 posted within the period under review. Six OPEC members had their rig count unchanged within the period under review. Angola, Congo, Equatorial Guinea, Gabon, Iran and Venezuela had 30, 0, 1, 0, 117 and 1, respectively.
The United States had minus five, as it recorded 250 as against 255 recorded within the period under review, while the United Kingdom had its rig count unchanged at four. Canada made an impressive plus 20, as it posted a record of 53 in August, as against 33 posted in July.
Nigeria’s Economy
Specifically, OPEC noted that following a nationwide shutdown, combined with a crash in oil prices in the first half,1H20, the economy of Nigeria recorded its first contraction since first quarter,1Q17, shrinking by 6.1 percent, year-on-year, y-o-y in 2Q20 following growth of 1.9 percent y-o-y in 1Q19. It explained that the oil sector slumped by 6.6 percent y-o-y following growth of 5.1 percent in 1Q20. The non-oil sector posted its first decline since 3Q17 by 6.1 percent y-o-y compared with growth of 1.6 percent y-o-y in 1Q20 as anti-COVID-19 measures brought a halt to indispensable economic activities such as transportation and storage (-49 percent y-o-y in 2Q20 versus 2.8 percent y-o-y in 1Q20); accommodation and food services (-40.2 percent y-o-y in 2Q20 compared with -3 percent y-o-y in 1Q20); construction (-31.8 percent y-o-y in 2Q20 versus 1.7 per cent y-o-y in 1Q20) and internal trade (-16.6 percent y-o-y in 2Q20 versus -2.8 per cent y-o-y 1Q20). Moreover, according to the Central Bank of Nigeria, consumer confidence slumped to -29.20 points in 2Q20 compared with -0.30 points in 1Q20.
According to OPEC, the unemployment rate surged to 27.1 percent in 2Q20 – the sharpest increase ever, according to Nigeria’s national bureau of statistics records.
Crude Oil Price Movements
The OPEC data also stated that crude oil spot prices extended their gains in August, climbing to a six-month high as physical market fundamentals continued to recover, and the surplus in the market eased further, which was reflected in the decline in crude oil stocks, in addition to a recovery in refinery operations and utilization rates in the main regions. The OPEC Reference Basket, ORB value rose in August, increasing more than other spot references. On a monthly basis, thE ORB increased $1.77 to $45.19/b, up by 4.1 per cent.
