The Organisation of Petroleum Exporting Countries (OPEC) on Tuesday confirmed that Nigeria produced 1.3 million barrels per day of crude oil in February, in alignment with the country’s earlier self-reported data this month.

 The information which the international oil cartel made public in its Monthly Oil Market Report (MOMR), further cemented Nigeria’s leader as Africa’s topmost producer, outperforming Algeria and  Angola.

But this is not discounting Nigeria’s underperformance to the tune of as much as much as 500,000 bpd, given its OPEC quota of 1.8 million bpd for the period under consideration.

OPEC , in the latest report also projected that world oil demand in 2023 will rise by 2.32 million bpd, or 2.3 per cent, unchanged from last month’s forecast.

Although faster Chinese demand could support the oil market this year, according to OPEC, but crude prices have fallen this week as the collapse of Silicon Valley Bank sparked fears of a fresh financial crisis.

China, one of the biggest hydrocarbons consumers, will help oil demand to grow by 710,000 bpd in 2023, up from last month’s forecast of 590,000 bpd and a contraction in 2022, OPEC added.

However, oil weakened after the report was released, extending an earlier decline. Brent crude, Nigeria’s benchmark, was down over $1 to below $80 a barrel.

Overall, OPEC’s oil production rose in February despite output cuts by the wider OPEC+ group. OPEC stated that  its crude oil output in February rose by 117,000 bpd to 28.92 million bpd, helped by a further recovery in Nigeria.

But despite the rise, OPEC is still pumping much less than called for by the OPEC+ agreement, as Nigeria, Angola and other members still struggle to reach their targets.

While there was marked improvement in output from Nigeria, Saudi Arabia and Congo, Angola and Iraq mostly underperformed in February, creating a drag on the cartel’s supply for the month.

On OPEC’s forecast for the Nigerian economy, the oil producers group stated that the rising trend in inflation, ongoing external and fiscal pressures, and deteriorating global macroeconomic conditions are expected to lead towards decelerating economic activity in 2023.

Meanwhile, Moody’s Investors Service has placed six US banks on review for potential credit rating downgrades in the wake of last week’s collapse of Silicon Valley Bank.

The credit ratings firm also downgraded Signature Bank deep into junk territory following that bank’s failure. Ratings downgrades can make it more expensive for companies to borrow money, CNN reported.

Moody’s warned it could similarly downgrade First Republic Bank (FRC), Zions (ZION), Western Alliance (WAL), Comerica (CMA), UMB Financial (UMBF) and Intrust Financial. The firm cited the “extremely volatile funding conditions for some US banks exposed to the risk of uninsured deposit outflows.”

Silicon Valley Bank was shut down last Friday morning by California regulators and was put in control of the United States Federal Deposit Insurance Corporation (FDIC)

The collapse of the bank has impacted the price of Nigeria’s oil benchmark, Brent, which  fell nearly 2 per cent in volatile trading on Monday as the event roiled equities markets and raised fears of a fresh financial crisis.

 Emmanuel Addeh in Abuja
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