This is a working example config of nginx server emitting OTel traces. To test this setup run curl localhost:8080/produce_200 or any of the other included proxy_pass configs.

nginx-otel.conf

load_module modules/ngx_otel_module.so;

user  nginx;
worker_processes  auto;

error_log  /var/log/nginx/error.log notice;
pid        /var/run/nginx.pid;


events {
    worker_connections  1024;
}

http {
    otel_exporter {
        endpoint localhost:4317;
    }
    include       /etc/nginx/mime.types;
    default_type  application/octet-stream;

    log_format  main  '$remote_addr - $remote_user [$time_local] "$request" '
                      '$status $body_bytes_sent "$http_referer" '
                      '"$http_user_agent" "$http_x_forwarded_for"';

    access_log  /var/log/nginx/access.log  main;
    otel_service_name nginxtest;
    server {
    	listen 127.0.0.1:8080;
        location /produce_404 {
		otel_trace		on;
		otel_trace_context	inject;
		proxy_pass http://www.example.com/;
        }
        location /produce_200 {
		otel_trace		on;
		otel_trace_context	propagate;
		proxy_pass http://www.example.com/;
        }
        location /produce_301 {
		otel_trace		on;
		otel_span_name this_produces_a_301;
		proxy_pass http://pokeapi.co/api/v2/berry/2;
}
        location /produce_502 {
		otel_trace		on;
		proxy_pass https://pokeapi.co/api/v2/berry/2;
        }
    }

    sendfile        on;
    #tcp_nopush     on;

    keepalive_timeout  65;

    #gzip  on;

    include /etc/nginx/conf.d/*.conf;
}