OPEC, in a country-by-country analysis of developments
within its member countries in its latest Monthly Oil Market Report (MOMR),
said the previous month, it fell by 13.9 per cent, although the non-oil sector
grew by 1.7 per cent.
The report showed that Nigeria’s real Gross Domestic Product
(GDP) grew by 0.1 per cent year-on-year in Q4, 2020, following a 3.6 per cent
contraction in Q3, 2020, which was the first positive quarterly growth in the
last three quarters amid the gradual return of economic activities.
“The non-oil sector expanded 1.7 per cent, recovering from a
2.5 per cent decline in 3Q,2020, mainly driven by growth in the
telecommunications and information services sectors.
“Other important contributions came from the agricultural
sector, which expanded by 3.4 per cent y-o-y in 4Q, 2020. Meanwhile, the oil
sector dropped by 19.8 per cent y-o-y after a 13.9 per cent y-o-y contraction
in 3Q, 2020,” the report for May stated.
It stated that in 2020, the economy contracted 1.9 per cent
y-o-y, following a 2.3 per cent y-o-y expansion in 2019, while inflation was
still structurally high in the first quarter of this year, with the annual
inflation rate jumping to 18.17 per cent in March 2021, the highest rate since
January 2017 amid the continued impact of the COVID-19 pandemic that has also
weakened the currency.
Meanwhile, a surge in oil output by Russia and Oman in April
lowered the compliance rate to the OPEC+ production cuts, with the nine
non-OPEC countries that participate in the cuts overproducing by 347,000
barrels per day, equating to a compliance rate of 85 per cent, the lowest level
for the 12 months that the pact had been in force.
Compliance among the 10 participating OPEC countries, by
contrast, was 123 per cent, thanks largely to the Saudis’ additional voluntary
reduction of one million bpd in February-April, which came on top of its
official OPEC+ cut of 1.88 million bpd.
The average compliance rate for the entire OPEC+ group fell
to 110 per cent in April from a record high of 113 per cent in March.
The non-OPEC partners’ poor performance is certain to
aggravate the Saudis and other Mideast and African producers, which have hit
their targets in recent months which could create a tense atmosphere during
future negotiations about opening the taps in the second half of the year.
Saudi Arabia is looking to unwind its voluntary cut of one
million bpd in May-July, which will necessitate winning back market share that
it ceded in Asia when the voluntary cut was enacted in February.
Also, oil prices dropped by almost three per cent yesterday
and were set for the biggest percentage drop since early April, after the
restart of Colonial Pipeline, eased some of the concerns about petrol shortages
in the U.S. East.
As of yesterday afternoon, West Texas International crude
was falling by 2.94 per cent at $64.14 while Brent Crude was down by 2.64 per
cent at $67.49.
Oil prices snapped the winning streak from earlier this week
when reports from both OPEC and the International Energy Agency (IEA) reiterated
the view that global oil demand would rebound strongly in the second half of
the year with more economies reopening and increased travel amid higher
vaccination rates.
The IEA’s bullish outlook on demand, coupled with a similar
view from OPEC from Tuesday, sent oil prices to an eight-week high on
Wednesday, almost hitting $70.
0 comments:
Post a Comment