The Nigeria’s crude oil production for August 2020, according to the Organization of Petroleum Exporting Countries (OPEC), increased from 1.35 million bpd in July, a 0.6% increase to 1.35 mbpd.
At the beginning of the quarter, OPEC and its allies such as Russia agreed in their meeting to ease record oil supply curbs from August and taper cuts to 7.7 million bpd till December. Since May, OPEC has been cutting output by 9.7 million bpd or 10% of global supply, after the COVID-19 virus was deemed to have destroyed a third of global demand.
However, fears of a second wave of the coronavirus are weighing heavily on the market, and OPEC said that “a second strong wave” could deepen the hit on demand to 11 million bpd this year. Additionally, the international oil benchmark, Brent Futures, surged by 8.4%, supported by an improvement in Chinese factory data, rising energy demands, and hopes for an agreement in the United States on more coronavirus-related economic stimulus – reaching a peak of $45.58 during the quarter before settling at $40.95 by the end of the quarter.
The 2nd Quarter 2020 (Q2 2020) shows that the Nigeria’s Gross Domestic Product (GDP) decreased by -6.10% (year-on-year) in real terms, and aggregate GDP stood at N34,023,197.60 million in nominal terms.
The Q2 2020 growth rate of -6.10% indicates a drop of -8.22% points, and on quarter-on-quarter basis, a fall of -7.97% points when compared to the first quarter of 2020 (1.87%).
Overall, the nominal growth rate was -16.81% points lower than recorded in the second quarter of 2019, and -14.81% points lower than recorded in the first quarter of 2020.
Inflation
Nigerian headline inflation rose for the 13th consecutive month to a 30-months high in September 2020. The Consumer Price Index (CPI) which measures inflation maintained its upward trajectory, as headline inflation just hit 13.71%, from 12.82% in July.