The price of oil reached a two-month high on Thursday, amid a struggle by Nigeria to meet its daily production targets.
Data from Reuters showed Brent Crude (Nigeria oil benchmark) rallied to $77.25 per barrel the highest levels since late July.
While West Texas Intermediate also gained 1.41 percent to close at $73.25 per barrel. Natural Gas also gained 4.64 percent to close at $5.028 on Thursday.
The rise in crude oil price is buoyed by growing fuel demand and a draw in US crude inventories and also challenges in the Gulf of Mexico after two hurricanes.
Despite this window of opportunity, Nigeria is finding it very difficult to find solution to its operational issues hampering production in various fields.
Other oil producing nations such as Saudi Arabia, Russia among others in the OPEC+ group of 23 on the hand are adding about 400,000 barrels per day of supply to the market each month.
According to data from OPEC, Nigeria self-reported crude output of 1.27 million bpd in August, down from 1.44 million bpd in July was also lesser than the 1.54mbpd allowed.
“The overall NNPC Crude Oil lifting of 8.66Mbbls (Export & Domestic Crude) in June 2021recorded 19.84% decrease relative to the 11.58Mbbls lifted in May 2021,” NNPC noted in its August FAAC report.
The report also revealed that in May, 30 various disruptions at production site from community clash, fire out breaks among other operational breakdown resulted to production loss of 4,187,500 barrels of oil.
Using the average oil price for May, which is $68.53, according to Statista, Nigeria’s struggling economy lost approximately $286.9 million in one month, which equates to about N118.2 billion at a N412 exchange rate.
Admitting this challenges, Timipre Sylva, Nigeria’s minister of state for petroleum resources, told a group of journalists recently that Nigeria’s oil fields were struggling.
He stated, however, that this was due to technical issues in re-tapping reservoirs that had been closed to meet with the strict OPEC+ cutbacks of the previous 17 months.
“We had some difficulties with shutting down the reservoirs,” he told SPglobal, adding “when you shut down a reservoir, restarting it may be difficult.”
He did, however, promise that output will be back to about 1.7 million bpd by November and 2 million bpd by the end of the year.