EXPERTS: HOW NIGERIA CAN CONSERVE 400,000 BPD OF CRUDE OIL

The Organization of Petroleum Exporting Countries and its allies (OPEC+) continued to boost its output on Wednesday by 400,000 barrels per day (bpd), despite the fact that several of its members, notably Nigeria, failed to meet their monthly supply targets in December.

The shortest OPEC meeting in history ended in roughly 16 minutes, with the group sticking to its aim to boost market supplies by 400,000 bpd per month. Over the past 12 months, the cost of Brent crude oil has increased by nearly 58%. After hearing the news, the price of crude oil rose to a seven-year high of $90 a barrel before partially reversing course and trading at $89.02 yesterday.

Nigeria, Angola, Equatorial Guinea, and Congo, members of OPEC from Africa, have not met their goals for crude oil production, placing the burden of resuming supplies on Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait, members of the Gulf Cooperation Council.

According to economists, using conventional drone technology along with unconventional strategies might help Nigeria protect some 400,000 barrels of crude oil every day.

According to a release, the experts recently spoke during a breakfast session hosted by the Lagos Business School.

The statement went on to say that Nigeria will gain from macroeconomic, fiscal, and foreign exchange benefits that would all strengthen the naira and add to the country's external reserves, despite the fact that the local currency had fallen to N710/$ in the black market.

According to the statement's citation of Bismark Riwane, the Chief Executive Officer of Financial Derivatives Company, the naira was likely to cease depreciating shortly and start appreciating around N670–N680/$ in October with the gradual adjustment of the official Investors & Exporters rate (N431/$).

There is a glimmer of optimism for the economy, but only if some policy measures are implemented right away, according to the statement. One of these is guarding the oil pipelines, which Nigeria loses monthly to the tune of about $1.3 billion. Approximately 400,000 bpd of crude oil might be safeguarded using a combination of traditional drone technology and unconventional strategies (the Tom Polo project).

Nigeria will receive macroeconomic, fiscal, and foreign exchange benefits that will all strengthen the naira and add to external reserves. The parallel market Naira has once more declined below N710/$. The good news is that the Naira is likely to stop bleeding very soon and start to appreciate toward N670 or N680/$ in October with the slow and steady adjustment of the official I&E rate (N431/$).

The announcement claimed that Nigerian inflation needed to moderate noticeably in the fourth quarter of 2022.

We anticipate a discernible decrease in Nigerian inflation in Q4 2022 because exchange rate pass-through to domestic prices is a major factor contributing to the country's spiraling inflation (17.5percent).

Additionally, we anticipate that, despite being lower than Q2, gross domestic profit growth in Q3 will be favorable (3.54percent). When these ambiguities and the next election are taken into account, the economy might start to slowly recover before Christmas.

Nigerians are caught between fear, optimism, and doom with fewer than 160 days to the general election. Not many of them are hoping that 2023 February will be Uhuru (i.e. independence & wealth), but may be a fresh beginning.

The election will either be a vote of discontent or a referendum on the economy, depending on how quickly the Nigerian economy bounces back from its current situation. According to the statement, Nigeria is not the only African nation dealing with issues like skyrocketing inflation (19.7%), a weak currency (710/$), oil theft, and significant unemployment.