19m bar­rels Nige­rian crude strug­gling to find buy­ers

Daily Trust - - FRONT PAGE - Daniel Adugbo with agency re­port

Around 19 mil­lion bar­rels of Nige­rian crude oil for Novem­ber load­ing are strug­gling to find buy­ers as Asian and Europe re­fin­ers have either started look­ing fur­ther ahead or turned to closer and in­creas­ingly cheaper crude oil grades.

Traders said the sur­plus car­goes of Nige­rian crude oil were slow to clear on Tues­day but An­golan crudes fared bet­ter be­cause of pa­tron­age by Chi­nese buy­ers.

“The out­look for Nige­ria is not fan­tas­tic,” one trader told Reuters. “De­mand has slowed down mas­sively.”

The United States, which had been a keen buyer in re­cent weeks, is now turn­ing cold on West African grades.

“Septem­ber and Oc­to­ber were the peak ar­bi­trage months,” one trader said of the Africa to United States flow. “There’s been a drop off in the (crude) we’re see­ing go to the U.S.”

Chi­nese buy­ing, along with other Asian ten­ders, had ab­sorbed more of the De­cem­ber An­golan pro­gramme, traders said.

De­spite the cur­rent set­back Nige­ria is ex­pected to see some sta­bil­ity and pre­dictabil­ity in her crude oil sales in Jan­uary when lift­ing con­tract for the 2015/2016 pro­gramme comes to force.

The as­sur­ance of an end to the era of over­hang comes as the Nige­ria Na­tional Petroleum Cor­po­ra­tion (NNPC) on Tues­day opened bid for po­ten­tial crude term con­tracts win­ners.

“The ab­sence of cred­i­ble buy­ers has re­sulted in sit­u­a­tions where in­di­vid­u­als pick car­goes and they will not know what to do with them and at the end of the month it be­comes an over­hang; then we have fake sup­ply glut or over­sup­ply that do not ex­ist but which the mar­ket re­acts to and we have lower val­ues,” said Mele Kyari, Group Gen­eral Man­ager, Crude Oil Depart­ment of the NNPC.

Crude oil tanker

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