The Egyptian Ministry of Petroleum and Mineral Resources announced on Thursday a new oil discovery in the shallow waters of Geisum concession south of the Gulf of Suez, with an initial production rate of 2,000 barrels of crude oil per day.

The Organisation of Petroleum Exporting Countries (OPEC) says Nigeria’s daily crude oil production fell to 1.17 million barrels in December 2020.

According to the January Monthly Oil Market report, this is 155,000 barrels lower than the 1.32 million barrels per day produced in November and 173,000 barrels lower than the 1.34 million barrels per day produced in October.

OPEC said the crude oil production data is based on direct communication.

“Crude oil output increased mainly in Libya, Iraq and the UAE, while production decreased primarily in Nigeria, Congo and Angola,” the report read.

The organisation said a meaningful rise in oil prices alongside a positive trajectory from the COVID-19 vaccines would brighten the 2021 outlook for Nigeria and lay the groundwork for medium-term GDP growth.

“Nigeria’s economy entered a recession in Q3’20 with real GDP contracting by 3.6% y-o-y after a sharp contraction of 6.1% y-o-y in 2Q20. Moreover, the inflationary pressure continued to challenge Nigeria’s economy, as the CPI rose to 14.9% y-o-y in November from 14.2% y-o-y in October.

“Elevated food prices and possible naira adjustments pose additional inflationary risks. Inflation rose by 1.60% m-o-m in November 2020, the highest since May 2017, following an increase of 1.54% in October 2020.

“On a bright note, consumer confidence increased to -14.80 points in 4Q20 from -21.20 in 3Q20. Business confidence, in contrast, decreased to -15.20 points in December from -1.50 points in November.

“Moody’s rating agency noted that Nigeria’s credit rate is now B2/negative, which reflects increasing exposure to fiscal and external shocks amid the limited fiscal resources available.

Otherwise, the Stanbic IBTC Bank Nigeria PMI increased to 51.8 in December 2020 from 50.9 in the previous month, indicating an overall improvement in the Nigerian non-oil private sector. Also according to the survey sentiment regarding 2021 recorded a five-month high, fuelled by business expansion plans.

“In the meantime, a meaningful rise in oil prices following the recent DoC decisions along with a positive trajectory from COVID-19 vaccines would brighten the 2021 outlook and lay the groundwork for a hopeful medium-term real GDP expansion.”

OPEC and its allies have adopted a production cut system to resolve a crude oil supply glut in the global market and shore up prices.

Members who exceed their production quota are required to make up by reducing supply to the market in previous months.

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