National oil production edged up 0.65% to 1.24 million barrels per day in June 2022 from 1.23 million barrels per day in May 2022, chief operating officer Bismarck Rewane said. of Financial Derivatives (FDC) Limited in its bi-monthly publication. .
Nigeria’s tax revenue is heavily dependent on oil exports; therefore, lower oil prices and production will reduce tax revenues while increasing debt market borrowing. This will result in a heavy debt service burden and could increase the risk of debt distress.
The number of oil rigs in the country, on the other hand, remained constant for the third consecutive month at 11 in June. OPEC crude oil production increased by 234,000 barrels per day to an average of 28.72 million barrels per day in June, from 28.51 million barrels per day produced in May. Oil production increased mainly in Saudi Arabia, the United Arab Emirates, Iran, Kuwait and Angola, while it fell sharply in Libya and Venezuela.
The price of Brent crude remained above the $100/bp threshold during the review period as global supply continued to remain below par. It fell to £103.75, however, on fears of a possible slowdown in demand as aggressive global interest rate hikes and lockdowns in China raise the risk of recession, before rising by 5 .62% to close July at £109.58 on limited supply. On average, the price of oil fell 6.99% to $106.11 a barrel in the second half of July from $114.09 a barrel in the same period in June.
The supply of the world oil market is expected to remain tight due to the shortage in Russia.
However, fears of a global recession could cause the price of oil to fall in the short term due to a possible slowdown in demand. Oil theft and vandalism of pipelines will continue to hamper domestic oil production.