Demand for Nigeria crude under pressure

Crude oil merchants are seeking higher discount on the various grades of Nigeria crude. Some are asking as much as $1.2 per barrel. As a result demand has sagged as many buyers pressed for more discounts to dated Brent. This is coming on the heels of an oversupplied market. The United States of America is now producing crude from shale that has resulted in over supply of crude in the international oil market. This has led to a drop in the prices of crude from above 50 dollars a barrel to about $48 per barrel.

This has implication for Nigeria as a fall in prices of crude will have yet another negative effect on the economy. The hope of a quick recovery will be dim. Already more than three dozen cargoes from across West Africa were said to be available for sale from the April loading plans, with May export schedules due later in the week.

According to oil market report despite offers from South African storage and slow buying interest, ExxonMobil is offering Qua Iboe at a discount of $1.20 per barrel.

Meanwhile it is estimated that about 30 cargoes of Nigeria crude are still available, with light grades such as Akpo and Agbami under particular pressure. Traders said the differentials to both of these were likely to be negative now.

Also it is expected that more loading delays of one to two additional days plagued Qua Iboe, after the programmes had been reissued several No cargoes of Bonga were expected to load in March due to field maintenance. Those selling from the April plan were asking prices of around dated Brent plus $1.30.