Nigeria cuts oil price by $2 per barrel

Used oil barrels are seen outside a garage in Cuevas del Becerro, near Malaga, southern Spain February 16, 2015. REUTERS/Jon Nazca

Nigeria has forced down prices of her crude grade by $2 per barrel, as crude sale woes rocking the global market took a toll on the country.

Two cargoes of August prompt-loading Forcados, a grade from Nigeria, still await a buyer, while 13 cargoes of other grades from the country are also caught in the web of search for buyer

Struck by this bearish sale for August loading when September sale schesule is already appearing, Nigeria, a loading schedule sighted last weekend showed, had been forced to downgraded prices of its grades by $2 per barrel below the Brent market price.

This is among the lowest prices a Nigeria grade is sold at the global market in 2019

“A glut of light sweet crude in the Atlantic basin owing to a surge in U.S. exports and homeless North Sea cargoes has sent differentials for Nigerian sliding,” a report by Reuters stated.

“Around 15 cargoes of Nigerian crude remain from the August loading programme, with the prompt barrels dragging down prices for September cargoes yet mostly failing to attract much buyer interest despite seller mark-downs.
“Bonny Light and Qua Iboe were said to be trading below dated Brent plus $2.00,” the report added.
Meanwhile, India has depeened its appetite for Nigeria’s oil following U.S. sanctions on Iran.

India ceased crude oil imports from sanctions-hit Iran but ramped up shipments from Nigeria, Venezuela, USA, Iraq and United Arab Emirates (UAE), fresh data sourced from the commerce ministry showed.

Overall, the country’s crude oil imports last June declined 13 per cent to 16.9 Million Tonne (MT). In the three months ended June, oil imports dropped 2.29 per cent to 55.4 MT.

While oil imports from Iran ceased in June, imports rose 82 per cent from Nigeria, 26 per cent from Venezuela, 96 per cent from USA, 12 per cent from Iraq and 66 per cent from the United Arab Emirates (UAE).

Interestingly, while the government-owned oil marketing companies (OMCs) have stopped crude oil imports from Venezuela in the light of US sanctions, private refiners continue to import crude oil from that nation.

“Government-owned OMCs have stopped importing oil from Venezuela since US announced sanctions on the country’s oil company PDVSA.

However, it seems that private companies continue to import Venezuelan crude either directly or indirectly, ”an executive from one of the three government-owned OMC requesting anonymity told ETEnergyWorld.

According to data published by the commerce ministry, Nayara Energy-owned Vadinar Port received 1.45 MT of Venezuelan crude oil in the first three months of the current financial year compared to 0.55 MT handled in the corresponding period last year.

Similarly, Sikka port, which primarily receives and evacuates petroleum and petrochemical products for RIL’s Jamnagar petroleum and petrochemical products for RIL’s Jamnagar refinery, handled close to 1 MT of Venezuelan crude oil in the three months ended June 2019 as against 1.32 MT handled in the same period last year. RIL’s port located in Jamnagar’s Special Economic Zone (SEZ) handled close to 1.27 MT of Venezuelan crude oil in the first three months of the current financial year, compared to 1.74 MT handled in the corresponding period. A year ago, RIL had in April said it had purchased crude originating from Venezuela from companies such as Russia’s Rosneft in full knowledge of US authorities.

Overall, India’s share of crude oil imports from Middle Eastern countries decreased to 56.6 per cent of the total oil imports in the April-June 2019 period

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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