Nigeria's crude oil dynamics
Nigeria and Libya's increased oil production is adding to the volume of light, sweet crude looking for buyers, as Nigeria's August loading program shows 40 unsold cargoes. Kayode Omosebi, investment research analyst, ARM joins CNBC Africa for more.
Thu, 06 Jul 2017 11:43:28 GMT
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AI Generated Summary
- The OPEC production cut has not met compliance expectations, raising concerns about the oversupplied market.
- US policies favoring oil companies are driving up production, potentially challenging OPEC's efforts to stabilize prices.
- Nigeria faces revenue and fiscal challenges as oil prices fluctuate, with $40 per barrel being a critical threshold for fiscal stability.
Nigeria's crude oil market is experiencing a shift as increased production from Nigeria and Libya adds to the already oversupplied market. Kayode Omosebi, an investment research analyst at ARM, sheds light on the implications of these developments for Nigeria. The OPEC production cut of 1.2 million barrels per day was intended to address the oversupply in the market, but recent data shows that compliance is below expectations. While non-OPEC members like Russia have increased their cuts, concerns arise from the US, where policies are favoring oil companies and driving production up. US shale companies, with break-even prices as low as $25 to $30 per barrel, are projected to take over a significant portion of the market, potentially impacting global oil prices. Despite OPEC's efforts to stabilize prices by extending production cuts, the uncertainty in the market persists due to various factors.
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