NNPC lowers prices of Nigerian crude as demand wanes
In a bid a attract buyers, the Nigerian National Petroleum Corporation, NNPC, lowered prices of the country’s crude grades, SweetcrudeReports has learned.
Price schedules seen by this newspaper indicated that NNPC lowered the August price premiums for Bonny Light crude to 163 cents per barrel from 204 cents in July.
The Corporation also crashed the price of Qua Iboe to 157 cents from 215 cents the month before.
Data showed that lower demand for Nigerian crude will affect exports of Bonny Light, Bonga, Qua Iboe and Forcados as the number drops to 878,000 barrels per day (bpd) in September, from 954,000 bpd in August.
Between 25-40 cargoes remained for August loading.
Already, some oil majors will take in the excess cargoes into their own refining systems.
Reason for lower demand was due to the closure of many refineries for maintenance.
However, the majority will open soon as the maintenance period is almost over.
Top grades such as Qua Iboe and Bonny Light sold for a little over $2.00 above dated Brent as at Friday.
Nigerian oil export threatened by U.S shale
Last Friday, SweetcrudeReports reported that threat to exports of Nigerian crude oil grades by the U.S shale oil.
The light sweet grades are the most affected as they now face low demand especially as the summer driving season approaches and similar U.S. grades remain abundant.
The U.S shale oil is known for its lightness, very low sulphuric content and comes at lower prices which makes it be in high demand.
Shale oil boom has threatened not just the Nigerian crude varieties, but also other crude grades around the world, forcing prices to crash about four years ago. Prices are yet to fully recover ever since.
Due to low demand, the export of one of Nigeria’s crude varieties, Qua Iboe, is now down from 9 cargoes originally booked for export in September, to 8. Six cargoes were originally ordered for September, plus two left from August.
The programmes for other main grades are still being expected, while 25-35 cargoes remained for August loading.
Top grades like Qua Iboe and Bonny Light were on Thursday offered at around $2-$2.50 above dated Brent.
Nigeria majorly relies on revenue from oil exports to fund its national budget.
This year’s N8.8 trillion budget has been planned on the production of 2.3 million barrels per day at $60 per barrel.
SOURCE: sweetcrudereports.com
