The 1.796 million barrels per day oil exports quota given to Nigeria by the Organisation of Petroleum Exporting Countries (OPEC) is in jeopardy, New Telegraph has learnt.
The United States (U.S), which was hitherto the biggest importer of Nigeria’s crude, is now wrestling the Europe exports market with Africa’s biggest crude exporter. Crude loading figures obtained by this newspaper last weekend showed that the level of havoc the struggle for North West Market between the U.S –on one hand- and Nigeria and others – on the other hand.
“The US oil is on offer everywhere. It puts local grades under a lot of pressure,” said a trader with a Mediterranean refiner, who regularly buys Russian and Caspian Sea crude, and has recently started purchasing the US oil. Nigeria’s June oil exports are expected to fall dip below 1.8 million barrels per day, the loading plans showed.
Despite the relative strength of diesel cracks in Europe, Nigerian sweet crude oil grades, Platts confirmed in another report, have struggled to find homes in the European market. Competition among the Atlantic Basin sweet crude grades had heightened in the last two months, the reports noted.
The export plan, comprise 60 cargoes, for a total of 1.796 million bpd, compared with the 1.895 million bpd in May’s revised export programme. Brent, against, which Nigeria’s oil is priced, rose by $0.37 to $74.43 per barrel as of 7pm Nigerian time penultimate Monday, compared to around $66 at the start of this year. June exports will also include four cargoes of Akpo condensate with 133,000 bpd, compared with three cargoes in May offering 97,000 bpd.
The export plans showed two fewer cargoes of Agbami in June, and one fewer Antan, Bonga, Qua Iboe, EA, Okono, Pennington and Usan compared with the previous month. Nigerian oil export plans are prone to revisions and delays, with cargoes frequently pushed from one month to the next.
There were still more than a dozen May loading cargoes that had yet to trade, but little fresh spot deals surfaced penultimate Monday. Differentials for some grades had slipped, traders said, with Qua Iboe discussed at premiums close to $1 per barrel.
Refiners in Northwest Europe have seen more offers of US crudes of late, which are sweet grades that compete directly with Nigerian crudes, contributing to an overhang of Nigerian crudes and a sharp drop in pricing differentials of these sweet crudes since the start of March.
Europe is one of the key consumer markets for Nigerian crudes, followed by India, and distillate-rich grades such as Qua Iboe, Forcados and Bonny Light have met with limited buying interest from the European refiners, slowing down the sale of cargoes loading over May and June, sources said.
However, there was some hope of support emerging for the more distillate- rich grades in the future if diesel crack spreads hold. If this remains, some traders say they expect some support for certain Nigerian crudes to emerge, and a divergence between the distillate-rich Nigerian and light-end rich grades.
Global crude oil buyers have earlier shunned 20 cargo-loads of the commodity on Nigeria’s May loading programme , plummeting country’s revenues projection by $811.91 million.The move, which also worsened the gluts in the market came as 11 fresh Agbami, Escravos, Brass River June’s export flooded the market while trader, Vitol won tender by the International Companies (IOCs). About $811.91 million total crude revenues from Nigeria, checks by this newspaper showed, were put at risk.
Stating that 20 of the cargoes from Nigeria were lingering after being on offer for some two weeks, the schedule show Indian refiner BPCL was looking for West African grades in a tender that closed last weekend.
The plans included six cargoes of Agbami and Escravos and five cargoes of Brass River, though not all were full sized. “A backlog of roughly 20 cargoes from the May loading plan loitered. Despite this, other trading surfaced,” the schedule showed. For tenders, trader Vitol had won a tender to supply India’s IOC with two cargoes of crude oil.
“The tender sought oil loading June 21-30,” it stated. Stating that the grades were not immediately clear, the loading schedule added that India’s HPCL launched a tender to buy oil, which closes this week. Meanwhile, $10.22 billion loss is being suffered by Nigeria through crude output deficit from pipeline vandalism in 2016.
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