Nigeria’s Rig Count Dips by Three as OPEC Records Minus Three

-By Fred Ojiegbe

Nigeria’s rig count for the month of January dipped by three, having recorded 14 as against 17 recorded last December, data from the Organisation of Petroleum exporting Countries, OPEC, shows.

This is coming at a time OPEC rig count also decreased by three having recorded 584 in January, as against 587 recorded last December, while world rig count surged by 32, having recorded 2,232, as against 2,200 recorded within the period under review. Leading the losers pack in the 14 – member OPEC is Saudi Arabia whose rig count reduced by four, having recorded 111 in January, as against 115 recorded in December. Algeria has minus one, as its rig count was 41, as against 42 recorded within the period under review. Kuwait led the gainers’ pack, as it has plus three, having recorded 53 as against 50 recorded within the period under review. Angola and Ecuador has plus one each. While Angola has 41 as against 42, Ecuador has six as against five recorded within the period under review. Eight countries had their rig counts unchanged within the period under review. They are Congo, Equatorial Guinea, Gabon, Iran, Iraq, Libya, United Arab Emirates (UAE) and Venezuela, which have 2, 1, 9, 157, 77, 16, 66 and 25 respectively. The United States has minus 12, as it recorded 792 in January, as against 804 in December, while Mexico has minus three as it recorded 46, as against 49 recorded previously. The United Kingdom and the Organisation for Economic Co-operation and Development, OECD Asia Pacific had minus one each. While the former recorded 10 as against 11, the latter recorded 28 as against 29 recorded within the period under review. Canada had an impressive plus 70, as its rig count for January got to 205, from 135 recorded previously. OECD Americas also had an impressive plus 55, as its rig count reached 1,043 from 988 recorded previously.

Balance of Supply and Demand
Demand for OPEC crude in 2019 remained unchanged from the previous report to stand at 30.6 million barrels daily, mb/d, 1.0 mb/d lower than the 2018 level. According to secondary sources, OPEC crude production averaged 30.5 mb/d in first quarter, 1Q19, about 0.3 mb/d higher than the demand for OPEC crude in the same period, while in second quarter, 2Q19, OPEC crude production averaged 30.0 mb/d, in line with demand for OPEC crude. In third quarter, 3Q19, OPEC crude production averaged 29.4 mb/d, around 2.3 mb/d lower than the demand for OPEC crude. In fourth quarter, 4Q19, OPEC crude oil production stood at 29.6 mb/d, around 1.0 mb/d below the demand for OPEC crude. For 2019, OPEC crude oil production therefore averaged 29.9 mb/d, around 0.7 mb/d below the demand for OPEC crude. Demand for OPEC crude in 2020 was revised down by 0.2 mb/d from the previous report to 29.3 mb/d, which is around 1.3 mb/d lower than the 2019 level. The main reason behind the oil demand growth revision and hence the demand for OPEC crude is the outbreak of the Coronavirus and its expected impact on China’s oil demand and, by extension, global oil demand.