About 15 to 20 cargoes of Nigerian crude oil from the April
loading programme remain unsold despite the cut in selling
prices.
Some of those cargoes are expected to be absorbed by oil majors’
own refining systems, according to Reuters.
The official selling prices of a basket of May-loading crude oil
grades were reduced as buyers were reportedly largely reluctant to
pick up cargoes offered at and above a premium of $2 compared to
dated Brent.
Major grades, including Bonny Light and Qua Iboe, Forcados and
Escravos, saw a decrease of around 20 to 25 cents compared with
April.
The nation’s crude oil has had a difficult time clearing in
recent weeks, as offer levels were too high to attract buying
interest from European refineries.
Reuters reported on Tuesday that June-loading cargoes were being
offered at relatively high prices: Qua Iboe at a $2.50 premium to
dated Brent, Bonga at $3.75, Forcados at between $2.80 and $3.00,
and Yoho at $2.40.
Royal Dutch Shell said on Monday it had declared force majeure
on exports of Nigeria’s major Bonny Light stream after the closure
of one of two export pipelines, while Amenam, operated by Total, is
also under force majeure, trading sources said.
Traders said Bonny Light was still pumping, though not at 100
per cent capacity.
Asian demand for West African crude was said to be robust, but
European buyers cited significant backwardation and squeezed
margins in asserting that the offers were too high.
In a related development, oil supply by the Organisation of
Petroleum Exporting Countries hit a four-year low in April, a
Reuters survey found, due to further involuntary declines in
sanctions-hit Iran and Venezuela and output restraint by top
exporter Saudi Arabia.
The 14-member OPEC pumped 30.23 million barrels per day in
April, the survey showed, down 90,000 bpd from March and the lowest
OPEC total since 2015.
OPEC, Russia and other non-members, an alliance known as OPEC+,
agreed in December to reduce supply by 1.2 million bpd from January
1. OPEC’s share of the cut is 800,000 bpd, to be delivered by 11
members – all except Iran, Libya and Venezuela.
In April, the 11 OPEC members bound by the agreement achieved
132 per cent of pledged cuts, the survey found, compared to 145 per
cent in March, due to higher production in Nigeria and small
increases in Saudi Arabia and Iraq.
OPEC’s biggest production gain occurred in Nigeria, where
Total’s Egina field has helped boost output. Libya, the third
producer exempted from making voluntary curbs, also boosted
output.
Nigeria says the Egina field produces condensate, a type of
light oil excluded from the OPEC cuts. The survey includes the
field based on Total’s listing of it as a crude producer.
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