Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers - Business - Nairaland
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| Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by LRNZH(m): 8:07am On Dec 31, 2014 |
Almost half of Nigeria’s cargoes due to be exported in January are still available, Reuters has reported, even as oil prices reach the $50s trough, almost $10 below Nigeria’s benchmark price. The backlog has pushed Nigerian oil differentials versus Brent to their lowest since at least 2009 BFO-QUA at 65 cents a barrel, down 80 per cent since May, said Reuters. And it is also creating a discount frenzy between African and Gulf oil producers to Asian buyers. Asia has become a hotspot for a price war between African and Gulf oil producers who, hobbled by bulging global supplies and waning demand, are offering steep discounts to defend their market share in the world’s top net crude buying region. The competition is welcome news for Asian buyers. If oil stays near $60 per barrel, import costs for the world’s second biggest oil consumer, China, would drop to under $125 billion a year, versus $222 billion in 2013 when crude averaged $110. But for producers, it means more competition, and African sellers like Nigeria and Angola, faced with precarious finances due to plummeting oil prices, are struggling to make inroads into Asia, a Middle Eastern stronghold. Owing to the frantic competition for Asian buyers, India, THISDAY learnt, has taken the unusual step of asking Nigeria to offer it a 90-day credit line if it must continue to buy her crude oil. With the loss of the US market earlier this year, India has replaced it as Nigeria’s biggest buyer of the country’s light crude grade. “There is competition between West African and Middle East suppliers for the Asian markets, but the Middle East suppliers have the cost advantage,” said Philip Andrews-Speed, head of Energy Security Division at the National University of Singapore. The city-state is a major oil trading hub in Asia. Low operating costs in Saudi Arabia, Kuwait and the Emirates already allow these countries to offer hefty discounts. Now, a more than 50 per cent jump in freight rates between West Africa and China since September is adding to the relative advantage of Middle Eastern grades, which require shorter shipping distances to Asia. This has been a big setback for West African producers. West African exports got a brief boost in August when Brent’s premium to Middle East crude DUB-EFS-1M narrowed to less than $2 per barrel from almost $5 in June. But with Middle Eastern producers now offering even more competitive prices, the advantage has faded. “A year ago, a $2 premium would have been attractive, but in today’s environment it’s different,” a trader dealing with West African crude said. West African producers traditionally sold most of their oil to North America and Europe, but exports dwindled given a gusher of shale oil from the United States and higher output from nations outside the Organisation of the Petroleum Exporting Countries (OPEC). West African crude exports to Asia rose more than 4 per cent between January and December, Reuters data has shown. China accounted for most of the rise as it took advantage of low prices to build up oil reserves. But the higher West African arrivals into Asia were mainly due to sales before October, and have dropped since then due to Middle East discounts. Middle East producers continue to dominate the Asian oil market, with Saudi Arabia, the United Arab Emirates (UAE) and Kuwait all increasing shipments to the region since 2012. The Middle East accounts for around half of China’s imports and Africa has a 25 per cent share. With pricing an advantage for Gulf producers, one hope for West Africa is China’s drive for diversification in order to avoid over-reliance on Middle Eastern oil, JBC Energy said. But analysts are sceptical about the sustainability of steep discounts, as producers need higher prices to finance their budgets. “Governments that underpin their budgets with oil or metals have seen currency values plummet, reserves erode or current account deficits rise… Regimes built on oil wealth will come under pressure,” risk consultancy and insurance brokerage JLT Group said in its 2015 outlook.  http://www.thisdaylive.com/articles/nigeria-struggles-to-sell-oil-cargoes-offers-discounts-to-asian-buyers/198070/ 3 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by decode55(m): 8:17am On Dec 31, 2014 |
for me, this is welcome news. When Jonathan wins again come 2015 (notice I used "when" not "if" because its a certainty) I'm sure the first thing he would do is to diversify the Economy. [size=30pt] GEJ till 2019 [/size] if you quote me & insult me, may ogun solder your _asshole shut 70 Likes 3 Shares |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by decode55(m): 8:35am On Dec 31, 2014 |
I'd rather vote for someone who realizes oil prices are falling steeply & would take steps to do something about it Than someone who says he would single-handedly increase Oil Prices world wide  www.nairaland.com/2033799/magician-buhari-promises-stablize-oil Height of _cluelessness! When I read the news, this was my reaction  99 Likes 4 Shares |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by LRNZH(m): 9:09am On Dec 31, 2014 |
All those refurbished trains project will die a premature death with this. 18 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Caseless: 9:10am On Dec 31, 2014 |
decode55:what has he been doing in 6 years, diversifying or destroying the economy that you think he would do otherwise next year? We gave him six years to diversify the economy, he failed to do that. Just expect him to be kicked out next year. 157 Likes 2 Shares |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Caseless: 9:13am On Dec 31, 2014 |
Krak:the guy is too 'kiddy' for you to give ur attention. Just ignore him. 8 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Caseless: 9:15am On Dec 31, 2014 |
LRNZH:I hope so. 1 Like |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by CyberWolf: 9:22am On Dec 31, 2014 |
Caseless:so you people want the train to stop working  14 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Nobody: 9:31am On Dec 31, 2014 |
Caseless:thats a very bad wish..Remember the trains are meant for Nigerians.. 18 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by LRNZH(m): 9:41am On Dec 31, 2014 |
olatunji21: We need a more comprehensive rail project integrated with air and sea ports. Not this refurbished trains. Sai Buhari 37 Likes 1 Share |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Caseless: 9:42am On Dec 31, 2014 |
CyberWolf:yes! Atleast we go know say we no get train, Instead of those locomotives that takes 5 days to get to kano from lagos. 26 Likes 1 Share |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Caseless: 9:47am On Dec 31, 2014 |
olatunji21:yes, i knw the trains are meant for Nigerians and, it will not be wrong to demand something better for Nigerians. All we're saying is that; give Nigerians what human beings use in other clime, and not what is used to convey coal and other heavy material from their locations to the ports. 13 Likes 2 Shares |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Nobody: 9:50am On Dec 31, 2014 |
Caseless: You gave him 6years but constrained him using your false federalism(Unitary system) When Nigeria is ready to make States LGAs and Private Sector the vanguard of economic diversification, growth and development, we should be expecting more of this. 11 Likes 1 Share |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Nobody: 9:53am On Dec 31, 2014 |
LRNZH: Instead of you to ask the National Assembly to make laws that put the development of Railways in the hands of FG LGAs and Private Sector, your myopic mind keeps expecting change from an all powerful FG 12 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by LRNZH(m): 9:54am On Dec 31, 2014 |
Power and Refineries are supposed to be the first set of priorities apart from Security. But GEJ in his usual 'MAULAG' fashion went for trains. Misplaced priorities. 31 Likes 1 Share |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by juman(m): 9:56am On Dec 31, 2014 |
| What a clueless nation with useless "leaders". The oil should go to ten dollars per barrels. 9 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by omenka(m): 10:01am On Dec 31, 2014 |
How the cookie crumbles. I'm hoping to see that day Nigeria can't export a single drop of oil so we can have real leaders ready to roll up their sleeves and do some hard work, and not the nutcases high on petrodollars striding the corridors of power today. #TeamNoMoreOilExports. 32 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Nobody: 10:07am On Dec 31, 2014 |
Nigeria economy is in ruins.... We can't survive another 4 years under Jonathan. We need change, we deserve change! 13 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Nobody: 10:09am On Dec 31, 2014 |
1) Resource Control 2) Fiscal Federalism 3) Privatization 4) Political Federalism 5) Decentralization of Nigeria 6) Restructuring of Nigeria 6) Institutions giving detail account of their financial/other activities to the public through their websites/panels for public scrutiny every 3months. Which are the fastest route to I) economic diversification, ii) citizenry prosperity iii) political stability iv) reduce corruption These 7 points are the basis of True Federalism which can help Nigeria become a Super Power and a first world Nation. 16 Likes 1 Share |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by LRNZH(m): 10:09am On Dec 31, 2014 |
omenka: It may sound extreme but you have a point. Until oil becomes unpalatable, these corrupt poliyicians will never use their heads to lead properly. Only GMB is selfless enough to take on Nigeria's issues no matter lthe oil price. 29 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by LRNZH(m): 10:33am On Dec 31, 2014 |
WhiteTechnology: please shed more light on this points. Infact have you seen this tread? https://www.nairaland.com/2067016/photos-10-billion-us-dollars/4 Come lets have a discourse. 1 Like |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Nobody: 10:39am On Dec 31, 2014 |
LRNZH: Be more specific with your question to enable me hit my point quick fast and accurate. 3 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Firefire(m): 10:43am On Dec 31, 2014 |
wonderful ! |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by PassingShot(m): 10:45am On Dec 31, 2014 |
Make the oil price be 10 dollars per barrel sef. There are many nations without oil and they're doing far better than us. Mr. Clueless presided over a surplus regime of oil price but couldn't have any savings for rainy days? I mean what happened to the excess monies we earned when oil sold at above 100$ (peaked at $115) per barrel while our budget was done on 70 something dollars per barrel? You all know the answer as much as I do. As a result of the drop in oil price, our prodigal and clueless president and his team devalued the naira so that a dollar now exchanges for around 190 naira. If they were not clueless or corrupt, they would have known that a time like this was bound to come and could have kept enough in the excess crude account to augment the deficit during this hard times. Afterall other OPEC members are not known to have devalued their currency since the drop in oil price started. Talk of cluelessness and thievery at its peak! Kick Out Cluelessness in 2015 and Bring Back Hope and Change in GMB/PYO 22 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by LRNZH(m): 10:45am On Dec 31, 2014 |
WhiteTechnology: Lets start with 16 years of PDP. How will you rate them in trying to achieve the 7 points you raised over that time period? Be patient and go through the $10Billion thread when you have some time. You will be amazed. 2 Likes |
| Re: Nigeria Struggles to Sell Oil Cargoes, Offers Discounts to Asian Buyers by Firefire(m): 10:46am On Dec 31, 2014 |
decode55: Confirmed! 6 Likes |
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