The Nigerian National Petroleum
Corporation, NNPC, weekend, reduced the
prices of Nigeria’s crude oil grades —
Bonny Light and Qua Iboe — to their
lowest points in over a decade.
The decline, according to reports, was due
to declining demand for the country’s
crude oil in the international market. The
action, according to oil traders, was
engendered by the need for the country to
join in the fight for market share.
Specifically, the NNPC in a statement,
weekend, said it will sell July supplies of
Bonny Light crude at 23 cents more than
Dated Brent. This, according to oil trading
sources, was the smallest differential since
2005 and compares with a 50 cent
premium in June and $2.55 a year earlier.
The NNPC also lowered the official selling
price for Nigeria’s largest crude oil
stream, Qua Iboe, to dated Brent plus 35
cents per barrel, the lowest differential
since May 2005.
Dated cargoes
Dated Brent is a market term for a cargo
of North Sea Brent blend crude oil that has
been assigned a date when it will be
loaded onto a tanker. Cargoes that have
been assigned loading dates are referred
to as dated cargoes, wet cargoes or wet
barrels. Dated Brent prices are used,
directly and indirectly, as a benchmark for
a large proportion of the crude oil that is
traded internationally.
The drop follows North Sea crude, which
hit a 10-year low earlier this week as all
Atlantic Basin sellers, particularly those
with light, sweet oil, struggle to place
cargoes.
Rising output from US shale formations
had over the last couple of months
contributed to a market glut that drove
crude down almost 50 per cent last year,
roiling global markets as producer nations
lost revenue and foreign-exchange
reserves.
Speaking on the development, Hong Sung
Ki, a commodities analyst at Samsung
Futures Incorporated said: “Nigeria has no
choice but to cut their price differential to
fight for market share. The US was its key
oil buyer in the past but imports have been
shrinking with more shale output in an
already oversupplied market.”
Also speaking, Kash Kamal, senior
research analyst with Sucden, said:
“They’re playing along now, towing the
line with other OPEC members to try and
capture market share.
“It’s a really messy situation. Saudi Arabia,
with a marginal cost per barrel at around $
30 and substantial cash reserves, can
afford to stick it out with crude at these
levels. But Nigeria needs crude around $
115-120 to balance their budget.”
Data obtained from Bloomberg showed
that horizontal drilling and hydraulic
fracturing, or fracking, that unlocked
supplies in shale formations in North
Dakota, Texas and other states has
boosted US output to the highest in more
than three decades, forcing overseas
producers, whose exports to the US are
shrinking, to find new markets for their
crude.
The report noted that the US has bought
an average 30,000 barrels a day of
Nigerian crude this year, shipping almost
one million barrels a day from the country
in 2010.
In addition, the US Energy Information
Administration noted that w hile the United
States once absorbed more than a third of
Nigeria’s nearly two million barrels per
day (bpd) of exports, this slumped to close
to 60,000 barrels per day on average for
the first three months of this year.
Nigeria having particularly hard time
Energy sources stated that Nigeria is
having a particularly hard time with the
glut, as the shale boom in its once-key
market the United States has all but shut
out its exports.
According to oil traders, sellers of Nigerian
crudes have aggressively pushed into new
markets from Uruguay to China, but are
coming up against other crude producers,
including fellow members of the
Organization of the Petroleum Exporting
Countries, as well as new refineries that
are geared towards heavier oil.
As a result, the traders said, as much as
10 million barrels of Nigerian grades that
have already loaded are floating in
vessels, taking months in some cases to
find buyers.

l

No source?

Good for dem

upon everything u write...,You still never talk how much dem say fuel go be

sosanova:
l

Get a life.U r bigger than dis