THE price of crude oil has traded above $90 per barrel amid concerns over Nigeria’s daily production volume.
The ICIR analysis of data from the Central Bank of Nigeria (CBN) shows that this is the first time since April when crude oil prices went above $90 per barrel.
According to the CBN data, crude oil sold for $88.62 per barrel on Monday, July 1, it rose to $90.33 per barrel on Tuesday, slightly dropped to $90.30 per barrel on Wednesday, inched up higher to $90.39 per barrel on Thursday before settling at $90.18 per barrel on Friday.
This shows that crude oil price was on track for a fourth straight day above $90 per barrel in the week.
Further checks on the data shows that the last time crude oil price was above $90 per barrel was on April 30.
The price of crude oil has been trading above the budgeted benchmark rate of $77.97 per barrel since April 30, except for June 3 when it sold at $77.7, June 4 at $76.58, and June 5 at $76.66 per barrel.
In its 2024 budget, the federal government set crude oil production benchmark, including condensate, at 1.7 million barrels per day (bpd) and based the crude oil price at $77.97 per barrel, meeting the production target has been a major concern.
Monthly statistics from the Organisation of Petroleum Exporting Countries (OPEC), stated that Nigeria’s crude oil production fell sharply between January and May 2024. The June data is yet to be released.
It show that Nigeria’s crude oil production volume dropped consecutively from 1.43 million barrels per day (bpd) crude in January to 1.32 million bpd in February to 1.23 million bpd in March to 1.28 million bpd in April and to 1.25 million bpd in May.
The crude oil production shortfalls have caused the Nigerian government to have lost over N16 billion in revenue daily, amounting to N1.62 trillion in the five months, The ICIR analysed.
Nigeria’s oil and gas sector has long faced the challenges of crude oil theft, aging oil fields, poor crude oil terminal maintenance, and inadequate investments, insecurity, among others.
Recently, a major oil field, the Nembe Creek oil field, which produces roughly 150,000 bpd, was forced to shut down due to oil leaks on June 17, 2024.
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The leak occurred on the Nembe Creek Trunk Line (NCTL), a pipeline that transports oil from the field to the Bonny Oil Export Terminal.
The Aiteo Eastern Exploration and Production Company, the operator of the pipeline, confirmed the leak and the subsequent shutdown, regretting the production losses and the potential impact on the environment.
The federal government lamented that it might not meet its crude oil budgeted revenue of N15.7 trillion should oil production remain 27.0 per cent below its budgetary provisions.