Thursday, November 14, 2019

Nigeria crude oil sales drops as US shales takes over market

Must Read

Saraki, Dogara, Kwankwaso, Baraje, others form R-APC

Aggrieved members of the newPeoples Democratic Party in the All Progressives Congress (APC) yesterday made good their threat to...

BREAKING: Names, Portfolios Of Osinbajo’s 35 Aides Reportedly Sacked By Buhari Emerge [See Full List]

A report has emerged indicating names and portfolios of aides to the Vice President, Yemi Osinbajo allegedly sacked by...

Senate confirms 15 NDDC board nominees, rejects Nunieh

  …confirms appointments of Tosho as Chief Judge, Kanyip as NIC President  …Holds a minute silence in honour of Jummai Tafawa...

Nigerian crude has suffered its slowest sales of the year in August, traders said, as U.S. exports of competing light, sweet grades flood traditional markets in Europe and Asia.
The changes illustrate how U.S. President Donald Trump’s strategy for “energy dominance” is reshaping oil markets worldwide, as U.S. oil exports surged 260,000 barrels per day(bpd) in June to a monthly record of 3.16 million bpd.
Crude from Nigeria has largely been pushed out of the U.S. market in the last decade due to booming domestic output. Exports to the United States slid to zero for three weeks in July, the U.S. Energy Information Administration said.
But now shale oil from the U.S. Permian basin is pouring ever more into traditional strongholds for Nigerian oil in Western Europe, India and Indonesia.
Both Nigeria and the United States are big producers of the kind of light, sweet grades that are ideal for refining into gasoline.
According to IHS Markit, Europe has imported around 46% of Nigeria’s oil since the beginning of 2019, India nearly 18%, and the rest of Asia about another 10%.
“They’re facing bigger competition from the U.S., and in the last few weeks, U.S. exports have really picked up,” one major buyer of West African crude told Reuters.
As many as forty cargoes for export in August were still in need of buyers when Nigeria began publishing its preliminary programme for September exports beginning on Jul. 18.
It was the largest oversupply so far in 2019, with about 25 cargoes the monthly norm.
Though the excess has begun to clear, in part due to energy majors absorbing much of the excess into their own refining systems, the discounts sellers made to attract interest has lowered price expectations for Nigerian exports for September.
“They’ve got a big volume still remaining, and though the number of cargoes left for August is in the single digits, it seems to be taking longer and longer to clear lately. It’s not a pretty picture,” the crude buyer said.
A fire and explosion on June 21 which shut down the Philadelphia Energy Solutions (PES) refinery – a consistent buyer of Nigerian oil – only added to the marketing challenge.
Up to two month’s worth of light sweet oil, or about 20 million barrels, from West Africa and the North Sea which had been scheduled to arrive there were rerouted elsewhere at steep discounts, and prices have not since recovered in either region.
“Demand has been dire. (We) need margins to improve quickly and dramatically,” one seller of Nigerian oil said.
Traders said the competition for European demand was helping drive down offers for similar cargoes elsewhere.
“Imports of U.S. crude into Europe … (are) obviously having an impact on sweet demand in other regions.”
In a statement in May, the White House hailed U.S. inroads into far-flung markets “We are exporting more and more energy as production soars and President Trump negotiates better market access for our producers,” it said.
Mele Kolo Kyari, the new managing director of the Nigerian National Petroleum Corporation (NNPC), assured Reuters in an interview that buyers would not soon lose interest.
“I think the advantage we’ve had is the quality of our crude,” he said. “We know (buyers) will come.”

Leave a Reply

Latest Post

Sowore remains with us until his sureties come for him – DSS

The Department of State Services, DSS, on Wednesday said it can only release the Convener of #RevevolutionNow protest, Omoyele...

Senate approves N10.69bn for Kogi State

The Senate on Wednesday approved a promissory note issuance in the sum of N10.69 billion for Kogi State Government for projects executed on behalf...

Magu praises Liberian President for sending Anti-graft officers to Nigeria

Ibrahim Magu, Acting Chairman, Economic and Financial Crimes Commission, EFCC, has commended Liberian President George Weah, on his decision to send officials of the...

NNPC Assures of Transparency in Selection of Lead Insurer for Oil Assets

The selection of insurer for the Nigerian National Petroleum Corporation’s (NNPC) assets in the 2020/2021 would be transparent, just as is the practice in...

US-Based Nigerians, APC America Leaders Back Osinbajo

Leaders of the All Progressives Congress (APC) in the United States have thrown their weight behind Vice President Yemi Osinbajo, kicking against any plans...

More Articles Like This

%d bloggers like this: