A financial service company, Vetiva, says despite the efforts by the Organisation of Petroleum Exporting Countries to unwind production caps, Nigeria’s crude output has fallen below expectation.

The company in its half-year economic outlook titled “A strange labyrinth”, cited operational and security challenges as the reason for the development.

An oil & gas analyst at Vetiva, Victoria Ejugwu, expressed worries that while oil prices have soared higher, the industry continues to contract due to underproduction.

“Despite the fact that OPEC has been unwinding production caps, Nigeria’s crude output has fallen below expectation. This has been due to some operational problems, as well as issues stemming from insecurity. Given this, our outlook for the country’s production is somewhat cautious, and do not expect a significant deviation from current production levels. While oil prices have soared higher, the industry continues to contract, due to underproduction. Given this, we anticipate further contraction in Q3’22 that is, -7.00perctn and a marginal 0.1percent growth in Q4’22”

Speaking on the downstream sector, Ejugwu highlighted the impact of petrol price regulation on profitability margins.

The oil and gas analyst predicted that the downstream players would continue to see low margins in the coming months.

She however projected that Brent price would average $105/bbl for the full year.

Vetiva’s projection for Brent price is supported by continuous recoveries in global oil demand as well as slower supply growth from OPEC amid production hitches from its members.

Ejugwu added, “The oil market may continue to face tightness given low supply prospects and soaring demand as such, prices are expected to remain elevated”

She, however, noted that a significant downside risk to oil prices remains the possible reemergence of the virus.

PresidObi:
Nigeria needs good leaders.

Fahdiga:
Peter Obi will correct all these anomalies as the president. His administration will manage our economy expertly. A vote for Peter is a vote for progress

iwaeda:

Can Obi alone change the system or we he get another mad man to give him ideal

PresidObi:


Whichever way, at least, the mad man made Upper Iweka a better place. If a mad man gives him suggestions and you start buying petrol for #87, will you complain?

iwaeda:

Same lies Prof. Tam David-West sold to us

PresidObi:


Buhari is not Obi, they are miles apart in their capacity.

iwaeda:

Is he not a politician

PresidObi:


Buhari was not a politician before, he stopped as a military man.