Coronavirus triggers glut of unsold crude oil in Nigeria

Last updated on September 11th, 2021 at 02:59 pm

A glut of unsold, high quality Nigerian crude continues to build up with weak global demand caused by coronavirus and surplus supplies by Saudi Arabia, UAE, Russia and other OPEC nations.

Nigeria, which produces some of the easiest-to-refine crude that typically commands a premium, has 30 or more unsold April-loading cargoes, traders say, equal to 30 million barrels or 30 percent of daily world demand.

The Nigerian National Petroleum Corporation (NNPC) last week put the number as high as 50.

Globally, the oil market has lost around half its value this month as the coronavirus has led to a collapse its demand.

At the same time, supply is growing as major producers are pumping flat out to gain market share after Moscow refused to back deeper production cuts at a meeting of the Organization of the Petroleum Exporting Countries and its OPEC+ allies.

Demand has dropped as nations take unprecedented measures to limit the spread of the virus, cutting fuel demand. A lack of options for storage, as well as rising freight costs have also deterred buyers.

“It’s a very large overhang,” said a trader of Nigerian crude, who asked not to be named.

“It can be the best price and margin in the world, but there is no storage for crude and product as demand collapses and shipping cost is going through the roof.”

One trader expected differentials to go lower. Nigeria’s largest crude stream, Qua Iboe, valued at a premium of $3.00 a barrel to benchmark dated Brent in December, was offered at dated Brent minus 70 cents this week, two traders said.

(PMNEWS)

Albert Echetah

Recent Posts

South African Group Petitions For Chidimma Adetshina’s Removal FromInternational Miss Universe Pageant Over Identity Fraud Allegations

A group called Progressive Forces in South Africa has launched a petition against MissUniverse Nigeria Chidimma Adetshina, with the aim…

November 5, 2024

Mauritius Reopens Social MediaAccess in Response to PublicPressure

Mauritius on Saturday overruled its decision to prohibit social media until the election onNovember 10th which was caused by a…

November 5, 2024

UAE Crown Prince Arrives in Ethiopia for WorldWithout Hunger Conference

The UAE’s Crown Prince of Abu Dhabi, His Highness Sheikh Khaled bin Mohamed bin Zayed AlNahyan was in Addis Ababa…

November 5, 2024

Zimbabwe’s rich (Mbingas) linked to state looting

Gilbert Machokoto, a former teacher, said that setting up a business in the late 1980s, shortlyafter Zimbabwe's independence, was ‘like…

November 4, 2024

Historic Shift in Botswana as PresidentConcedes to Opposition Victory

Following elections in which the party that had ruled the diamond-rich nation for almost 60years suffered a historic setback. Botswana's…

November 4, 2024

Lightning Strike at Uganda Refugee CampClaims 14 Lives, Including Children

A lightning strike at a refugee camp in Uganda kills 14 people including children with 34 othershospitalized. The incident happened…

November 4, 2024

This website uses cookies.