The international oil benchmark, Brent crude, fell below the $40 per barrel mark on Monday, amid demand worries, as the Organisation of Petroleum Exporting Countries (OPEC) further cut its outlook for demand growth.
Nigeria, Africa’s biggest oil producer, said its crude oil production rose slightly to 1.36 million barrels per day in August from 1.35 million bpd in July, according to OPEC.
OPEC, in its monthly oil market report for September, said the crude oil production by the 13-member cartel increased by 760,000 bpd to an average 24.05 million bpd in August.
“Crude oil output increased mainly in Saudi Arabia, UAE, Kuwait, Algeria and Angola, while production decreased primarily in Iraq,” it said in the report released on Monday.
Brent, against which Nigeria’s crude oil is priced, fell by $0.36 to $39.47 per barrel as of 6:05pm Nigerian time on Monday, after the report was released.
Prices have fallen by almost 15 per cent so far this month.
OPEC and its allies, known as OPEC+, agreed in April to an output cut to offset a slump in demand and prices caused by the coronavirus crisis.
They decided to cut supply by a record 9.7 million bpd for May and June but the deal was extended in July by one month.
The cuts were later scaled back to 7.7 million bpd from August through the end of the year.
OPEC said on Monday that the effect of the COVID-19 outbreak on economic growth had significantly impacted oil demand growth in the first half of 2020.
The group said world oil demand would fall more steeply in 2020 than previously forecast due to the pandemic and recover more slowly than expected next year, potentially making it harder for OPEC+ to support the market.
It said in the report that this had led to a projected global oil demand decline of 9.5 million bpd for 2020, more than the 9.06 million bpd decline expected a month ago.
“The impact of COVID-19 related developments on already fragile global economic conditions remain challenging and will require coordinated global policy action from all market participants,” the group added.
It will be recalled that oil prices had collapsed as COVID-19 crisis had curtailed travel and economic activity.