W/Africa Crude: Nigeria’s July surplus gets smaller

A SURPLUS of Nigerian car-go for July loading is getting smaller after a drop in differentials boosted demand, traders said on Tuesday. According to Reuters, there were six to seven cargo of Nigerian crude for July loading, down from Monday’s estimate of 10-15.

The agency indicated that the number of August shipments remain steady at more than 40. “Qua Iboe, the largest export stream was valued at dated Brent plus 35 cents, the lowest since December 2015. Sellers are targeting higher numbers and August cargo are being offered at dated Brent plus 90 cents.

“Angolan crude has been selling more quickly after Chinese buying re-emerged. About six August-loading cargoes are still for sale – including shipments of Dalia, Mondo, Pazflor and Hungo. Differentials for some grades have risen due to increased demand and sellers were targeting strong numbers relative to the last reported levels. Hungo was offered at dated Brent minus 25 cents, up 15 cents from an offer reported on June 1. Dalia was offered at dated minus 60 cents, up about 50 cents from an offer reported on June 7.” Meanwhile, the price of some crudes rose marginally while others crashed in the market, yesterday. For instance, the price of Brent crashed from $49.68 to $49.61, while that of WTI rose from $47.07 to $ 47.08 per barrel respectively. The Organisation of Petroleum Exporting Countries, OPEC, stated that: “The price of OPEC basket of fourteen crudes stood at $46.89 a barrel on Monday, compared with $45.63 the previous day, according to OPEC Secretariat calculations.

“The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).”

The managing director/chief executive officer of Cowry asset Management Limited, Mr. Johnson Chukwu, indicated in a telephone interview that the market situation was fuelled by the decision of the United States not to be part of the Paris Club on climate change. He said that this gives impression that the United States would flood the market with commercial shale oil, thus worsening the present state of the market.

Chairman of International Energy Services Limited, Dr. Diran Fawibe, a close watcher of the volatile market had said in a telephone interview that the development constituted fresh threat to foreign exchange generation and budget implementation.

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