Nigeria has sent a signal that the recovery in global oil demand still has some way to go, with volumes of its next month’s loading struggling to find buyers, even among its main customers, a Bloomberg report has indicated.
As much as two-thirds of Nigeria’s crude for October export were yet to find buyers, according to traders specialising in the West African market, whose volume is enough to fill 30 Suezmax tankers, each carrying one million barrels of oil.
Indian Oil Corporation (IOC), Asia’s biggest buyer of Nigerian crude from the region had disappointed the market for a second week, compounding already sluggish sales to Europe, the producer’s other main market, the sources said.
The news medium reported that earnings for ships hauling West African oil to that region were at the lowest level in a month.
The state oil refining giant purchased just two million barrels of Nigerian oil in its latest tender, after a 1-million-barrel buy the previous week as opposed to the IOC typically buying as much as 20 million barrels of West African crude per month before the pandemic.
THISDAY recently exclusively reported that India, Netherlands and Spain, according to a Nigerian National Petroleum Corporation (NNPC) document, topped over 50 countries cutting across Western Europe, Oceania/Pacific, South America, North America, Middle East, Asia and Far East as well as Africa, which are favourite destinations for Nigeria’s oil.
Last year, India led the pack of buyers of Nigeria’s crude for the 2020 trading year with 107.89 million barrels, followed by Netherlands with 73 million barrels and Spain with a total quantity of 70.4 million barrels.
As the United States turned its back on Nigeria’s crude because it was more expensive due to its top quality, India and other countries had upped their hydrocarbons trade with Nigeria, the data obtained by THISDAY showed.
Meanwhile, oil rose to briefly top $73 a barrel at the weekend, supported by growing signs of supply tightness in the United States as a result of Hurricane Ida and as U.S.-China trade hopes gave riskier assets a boost.
About three quarters of the U.S. Gulf’s offshore oil production, or about 1.4 million barrels per day, has remained halted since late August, which is roughly equal to what OPEC member Nigeria produces. Brent crude rose to settle at $1.47, or 2.3 per cent, to $72.92, while the session high was $73.15 a barrel as United States West Texas Intermediate (WTI) crude rose $1.58, or 2.3 per cent to $69.72.
Both grades posted a small gain on the week, but Brent rallied 41 per cent this year on supply cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and some demand recovery from the pandemic. Oil and equity markets also got a boost from news of a call between U.S. President Joe Biden and his Chinese counterpart Xi Jinping, raising hopes for warmer relations and more global trade.
The United States added rigs in the latest week, energy service provider Baker Hughes said, indicating production may rise in coming weeks. Earlier, crude contracts fell more than 1 per cent after China said it would release crude oil reserves via public auction to help ease high feedstock costs for refiners.