The international oil benchmark, Brent crude, rose above $45 per barrel on Monday, supported by an improvement in Chinese factory data, rising energy demand and hopes for an agreement in the United States on more coronavirus-related economic stimulus.
Brent, against which Nigeria’s crude oil is priced, climbed by $0.81 to $45.21 per barrel as of 6:40pm Nigerian time on Monday.
Quota compliance by the Organisation of Petroleum Exporting Countries and its allies fell to 96 per cent in July, from 106 per cent in June, with their collective production increasing by 1.10 million barrels per day, the latest S&P Global Platts survey found.
Gulf members led by Saudi Arabia ended their voluntary extra output cuts, while some countries that have struggled to adhere to their quotas continued to pump above their caps, according to S&P Global Platts survey.
OPEC+ output is set to rise even further in August, with the 22-country coalition hiking its quotas by about two million bpd in anticipation of higher global oil demand.
But some of the additional production may be offset by so-called compensation cuts pledged by members that overproduced their quotas in May, June and July.
In particular, Iraq, Nigeria, Angola and Kazakhstan have come under intense scrutiny from their OPEC+ counterparts for their excess output.
Iraq has said it will cut an extra 400,000 bpd below its quota in August and September, after missing its target yet again in July, while Angola and Kazakhstan significantly improved their performance in the month.
Nigeria, meanwhile, maintains that some of its production should be categorised as condensate, which is not subject to the quotas.
A key monitoring committee co-chaired by Saudi Arabia and Russia, the two largest OPEC+ members, will meet August 18 to assess compliance and hash out the compensation cuts.
OPEC’s 13 countries produced 23.39 million bpd of crude oil in July, the survey found, up 1.08 million bpd from June. The 10 members with quotas under the OPEC+ accord achieved 94 per cent compliance with their committed production cuts, according to Platts calculations.
Nigeria was well above its cap in July, producing 1.56 million bpd, the survey found, though the country and OPEC officials say its offshore Agbami grade should be re-categorised as condensate.