Nigeria’s economy faces threat as fresh 25 oil cargoes await buyers.
Nigeria’s economy faces major significant risks in the days ahead, as the country is currently having difficulties getting buyers for its crude oil in the international market.
Reuters yesterday confirmed that 25 cargoes in the October and November schedules had barely attracted buyers over the last week.
It also revealed that higher offers emerged for the county’s grades but given the abundance of unsold cargoes, no buyers stepped forward, leaving differentials broadly unchanged.
According to the report, the nation’s cargoes have been slow to sell over the past few weeks, but this did not deter sellers from raising their offer prices for both Qua Iboe and Bonny Light.
Both were offered around $1.70 per barrel above dated Brent price, compared with recent indications of $1.55, with no buyers.
The world’s biggest trading houses said they foresee oil prices not falling below $65 per barrel and possibly breaking above $100 next year as U.S. sanctions on Iran reduce crude exports from the Islamic republic.
India’s Chennai Petroleum Corp Limited has shut a 74,000 barrel per day (bpd) crude at its 210,000 bpd Manali refinery in the southern part of the country from October 6 for about one month for planned maintenance.
Also, the Abu Dhabi National Oil Company (ADNOC) is building an oil storage facility under the mountains of Fujairah in the United Arab Emirates, industry sources disclosed.
The underground Mandous facility would have the capacity to store about 40 million barrels of oil and is to be completed by 2020, it was learnt.
As at Tuesday, traders were shunning Nigeria’s crude but showing interest in specifications from Angola, another major oil exporter in Africa.
The report identified that differentials for Nigerian crude remained unchanged as a lack of bids met an overhang of unsold cargoes, while demand for Angolan remained robust, evidenced by a flurry of fixtures that has pushed shipping rates to near two-year peak.