The average spot price of Nigeria’s benchmark crude oil, Bonny Light, stood at $85.68 per barrel in the first quarter of 2024, surpassing the 2024 appropriation act benchmark of $77.96 by $7.72. This data is based on the Central Bank of Nigeria’s (CBN) latest statistical bulletin.
In January 2024, the average spot price for Nigerian crude was $82.18, rising to $86.08 in February and reaching $88.80 in March.
Despite the high prices, Nigeria’s crude oil production fell short of the 2024 budget target. According to the Organisation of Petroleum Exporting Countries (OPEC), average production in January was 1.42 million barrels per day (bpd), dropping to 1.32 million bpd in February and 1.23 million bpd in March. This underperformance is attributed to theft, divestment by major oil companies from onshore fields, and insufficient investment in the industry.
The decline in production has impacted the federal government’s revenue and the Central Bank of Nigeria’s ability to enhance foreign exchange liquidity, crucial for maintaining the naira’s value.
Global crude oil prices increased significantly in Q1 2024 due to the Russia-Ukraine conflict disrupting global supplies and other geopolitical and economic factors. Several OPEC countries, including Saudi Arabia and Russia, extended voluntary production cuts totaling 2.2 million bpd to stabilize the market.
Credit: Nairametrics (Text Excluding Headline)
