By Udeme Akpan, with Agency Report
The global oil market remains dull as 50 unsold cargoes of Nigeria’s Bonny Light await buyers, indicating that the volatile market is still flooded with unsold stocks.
Reuters, which confirmed the situation, disclosed that despite the coronavirus pandemic, India purchased a bulk of the nation’s crude on Wednesday.
It stated that “India provided one of the few outlets for Nigerian oil as East Asian tenders were awarded to crude from elsewhere and a glut builds up.
“Tenders for sweet crude oil by Thailand’s IRPC and Taiwan’s CPC were not awarded to any West African grades, with the latter taking U.S. oil instead.
“Indian oil firms took in about 5-6 million barrels of Nigerian crude last week and two million so far this week, a trader said, with India’s IOC awarding a tender to Total for Akpo crude and possibly one other cargo.
“There remain around 50 unsold cargoes of Nigerian crude seeking buyers, with European demand largely non-existent.
“Contango in the global oil market has narrowed recently amid signs India and China are tapping vast amounts of floating storage collecting since demand dried up amid the coronavirus pandemic.
“Oil majors and trading houses have been offering Middle Eastern and West African oil stored at sea, as spot prices strengthened in Asia.”
However, the price of Nigeria’s Bonny Light hovered at $33.56 per barrel, with the Organisation of Petroleum Exporting Countries, OPEC, raising hope that the market was heading towards stability.
Rising from a recent engagement with China, which accounts for one-third of the global demand growth, OPEC, stated: “The meeting reflected on the impact of the COVID-19 pandemic on the global economy and oil market, as well as China’s domestic oil market, the rebalancing process of oil supply and demand, and China’s solutions for and optimisation of the oil and gas trade system.
“The meeting also reached a consensus on the importance of energy security and maintaining stability in the energy markets, strengthening collaboration between OPEC and China, as well as supporting and promoting the unique importance of multilateralism and globalization.”