Eleven members of the Organisation of the Petroleum Exporting Countries (OPEC) and 10 other nations are collectively trying to remove about 1.2 million barrels of daily production to stabilize the oil market. OPEC compliance was 86 percent last month, while non-OPEC was just 25 percent, in most cases. The countries are using October 2018 as the starting point for their curbs. Despite exceeding the output in January, there are concerns that the inability of the cartel to hold the price high and steady will have implications for Nigeria’s 2019 projections.

More than any other country, Nigeria needs the oil price to rise and in the worst case, remain steady at any price above the $60 benchmark of the 2019 budget. To achieve this, the country needs to avoid disruptions in crude production and also hope that the alliance under OPEC achieves its objective, even though many are yet to comply with the output cut, including Nigeria.

Contrary to a production benchmark of 2.3 million barrels per day (mbpd) used for the 2019 budget estimates by the Federal Government, Nigeria needs to cut production down by 53,000 barrels to arrive at a new quota of 1.685 million bpd down from the reference production figure of 1.797m bpd recorded in January.

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