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Oil: Nigerian cargo loiters as apathy threatens turnover - Edoman - 03-09-2020
Oil: Nigerian cargo loiters as apathy threatens turnover
March 9, 2020 Adeola Yusuf
![[Image: oil-.png?fit=666%2C346&ssl=1]](https://i2.wp.com/www.newtelegraphng.com/wp-content/uploads/2017/03/oil-.png?fit=666%2C346&ssl=1)
GLUT
Millions of crude oil barrels from Nigeria slated for export this month (March) have yet to be purchased
Fifty-five fully loaded crude oil cargoes from Nigeria at the weekend loitered as buyers’ growing apathy threatened the country’s oil prosperity at the global market.
This number of unsold cargoes, crude loading schedule showed, is about 70 per cent of April-loading from Nigeria that are “yet to find buyers, a marked decline from the normal pace of sales.”
Nigeria, Africa’s biggest exporter of crude, depends largely on proceeds from the commodity to service over 85 per cent of its budget.
The country budgeted $60 per barrel as a benchmark price for oil in its 2019 budget. Whereas, the commodity fell below $50 per barrel at the international market, stirring up about $10 budget deficit on every barrel of crude sold by the country last week.
The crude oil unsold lots, a report of the buyers’ apathy revealed, would be “competing against millions of barrels that were slated for export this month (March) but have yet to be purchased.”
Stating that the outbreak of Coronavirus was partly responsible for the dip in demand for Nigeria’s crude oil, the report added that the infection had already slashed demand from China and European refiners.
“Oil traders are struggling to sell West African crude oil as the coronavirus slashes demand from China and European refiners balk at purchases because of weak margins.
“The distances involved in transporting West African crude to Asia mean barrels exported in April likely wouldn’t reach China until May or even early June,” the report read.
It continued: “That means traders need to evaluate what Chinese demand will look like several months in the future.
“There are tentative signs that China’s economy is picking up, but activity remains muted.
“Demand for crude to be shipped to China has fallen dramatically in recent weeks due to the coronavirus. West African flows this month are expected to slump by a third, according to traders of the region’s barrels.”
On top of that, weak European oil refining margins, the report read, are depressing purchases.
“Most of Nigeria’s April export program is unsold, while about half Angola’s planned shipments for next month have yet to find buyers, according to two traders, who specialise in West African grades.
“They estimate that 55 Nigerian cargoes and 18 Angolan have yet to find buyers.”
The two nations, according to the report, are due to ship almost 100 cargoes next month, meaning the rate of unsold consignments is about 70 per cent.
“By this time in a normal trading cycle, 50 per cent of the oil should have been sold,” Reuters quoted some of the traders to have said.
“The slow sales for April are overlapping with unsold oil for this month.
“Traders estimate that about 17 per cent of March volumes for Nigeria and Angola haven’t yet been purchased, along with some shipments from smaller producers including the Republic of Congo, Gabon and Chad,” the traders added.