OPEC raised its total quota weeks after U.S. President Joe Biden visited Saudi Arabia try get big oil producers to pump more crude to cut prices.
The Organisation of Petroleum Exporting Countries (OPEC) and its allies on Wednesday raised Nigeria's oil production quota to 1.830 million barrels per day in September from 1.826 million barrels per day in August.
OPEC raised Nigeria's oil production quota at its 31st OPEC and non-OPEC ministerial meeting, according to a statement released by the organisation on Wednesday.
It noted the dynamic and rapidly evolving oil market fundamentals, necessitating continuous assessment of market conditions.
In recent months, Nigeria has failed to meet OPEC production quotas. The country has faced never-ending oil theft that has affected production output.
The federal government in its recent draft fiscal strategy paper for 2023 through 2025, presented by the Minister of Finance, Budget & National Planning, Zainab Ahmed, showed that oil revenue underperformed due to significant oil production shortfalls such as shut-ins resulting from pipeline vandalism and crude oil theft.
OPEC in its statement said chronic underinvestment in the oil sector has reduced excess capacities along the value chain (upstream/midstream/downstream).
It highlighted with particular concern that insufficient investment into the upstream sector will impact the availability of adequate supply in a timely manner to meet growing demand beyond 2023 from non-participating non-OPEC oil-producing countries, some OPEC Member Countries and participating non-OPEC oil-producing countries.
It noted that preliminary data for OECD commercial oil stocks level stood at 2,712 mb in June 2022, which was 163 mb lower than the same time last year, and 236 mb below the 2015-2019 average, and that emergency oil stocks have reached their lowest levels in more than 30 years.
The body adjusted upward the production level for OPEC and non-OPEC Participating Countries by 0.1 mb/d for the month of September 2022.
Analysts say the small increase is not likely to push down surging energy prices that have stoked inflation globally. The increase comes weeks after U.S. President Joe Biden visited Saudi Arabia in a bid to try get big oil producers to pump more crude to cut prices.