Libya, Algeria oil recovery pile fresh pressure on Nigeria exports

Nigeria’s crude may struggle to find outlets in the first quarter of this year as Libya and Algerian oil grades stage a comeback in a market that looks to be oversupplied with light crude oil.

Libya, which along with Nigeria was exempted from the planned production cuts by the Organization of Petroleum Exporting Countries (OPEC), was said to have started loading its first Sharara crude cargo in over two years this week.

The country’s oil production rose to 690,000 barrels per day (b/d), the highest in two years, according to its National Oil Company as output from its Sharara field picks up.

Reuters reported that U.S. East Coast refiners are in the midst of their biggest buying spree of Algerian crude in years as they take advantage of cheap oil spilling out of the region, creating further competition for West African sellers of light crude.

As at the weekend, Nigerian oil differentials was reported to have fallen to their lowest in more than a year as surplus cargoes of light crude oil flood the Atlantic Basin.

“Libya is producing 685, 000 b/d, but is targeting 1million b/d by year end. Libyan cargoes ‘could’ potentially displace some of our cargoes” Dolapo Oni, Head of Energy Research at Ecobank said.

“Nigeria’s key worries should be shale in the US and Libya oil recovery,” Oni said in a tweet.

Despite an Indian tender absorbing several Nigerian oil grades, around 25 Februaryloading cargoes were said to be still looking for homes less than a week before the next loading programme was due.