Dull crude oil spot market has impacted on Nigeria as buyers await the country’s crude price drop. Traders said prices were due for a downward correction after high official selling prices set the tone in March and April.
European refiners are interested in light Nigerian grades, which suit seasonal demand for summer gasoline grades. However, Europe has held back from paying steep prices indicated for May, preferring to buy competing regional grades that cut out shipping costs.
Offer levels for Nigerian crude remain unchanged despite weakening demand. Brass River and Qua Iboe is going at dated Brent plus $2.20 a barrel while Bonny Light is at dated Brent plus $2.30 a barrel, a price potential buyers see as somewhat ambitious.
About 30-35 cargoes of Nigerian crude were left from the April and May programmes although the bulk are May loading of which about 10 cargoes or 60 million barrels are for April-loading.
Nigeria’s Bonga crude sees first sale to US buyer in six months. The cargo of Nigeria’s distillate-rich Bonga crude is due to move to the US from the May loading program, traders said, after a near six-month hiatus.
According to US customs data, the last cargo of Bonga arrived in the US in December. Over the course of 2018, US imports of Bonga dropped to 36,272 b/d in December from 112/532 b/d in January. That trend was consistent with a general decrease in US imports of Nigerian crude. US imports of Nigerian crude have dropped from 506,000 b/d in mid-November 2017 to 7,000 b/d by the start of last month.
Bonga, which has a gravity of 29.4 API and a sulfur content of 0.25 percent, is known for yielding a high percentage of gasoil and distillates.
“Bonga is a bit special, as it is the only grade that has seen interest from the US Gulf Coast recently, particularly given that Nigerian exports into the US decreased dramatically over the last year,” a crude trader said.
Meanwhile, in January 2019, production of crude oil for Nigeria was 1.954 million barrels per day. The country, which was exempted from the previous Organisation of Petroleum Exporting Countries (OPEC) production cuts deal, agreed to a quota under the current accord. With a reference level of 1.738 million bpd, the country was given a new quota of 1.685 million bpd.
In February, Nigeria pumped 1.88 million bpd, 190,000 bpd above its cap, according to S&P Global Platts’ survey of industry officials, analysts and shipping data. The data for March indicates Nigeria has not yet mended its ways as it boosted output once again, this time by 90,000 barrels per day to a three-year high of 1.92 million bpd.
FRANK UZUEGBUNAM
