PREMIUM TIMES
Nigerian crude grades are failing to attract buyers from Europe, China and India as traders, to cut cost, shift to a blend of WTI (the main oil benchmark for North America) and Brazilian grades as a substitute for the country’s highly sought-after sweet crude.
Top crude grades of Africa’s biggest oil producer, Bonny Light, Forcados and Brass, have a reputation for being light in sulphur, a quality that has made them the darling of refineries in Europe and Asia.
But traders are flocking to the Urals crude blend because they see the Nigerian grades as relatively pricey, with traders reluctant to offload the country’s cargoes, according to S&P Global Commodity Insights.
That had driven Nigeria’s premium grade Bonny Light to 50 cents per barrel discount to Dated Brent on 6 June.
“WAF (West Africa) is losing out to alternatives in Europe – WTI, Midland and Brazilian grades have been consistently undercutting differentials, and sellers of Nigerian barrels just cannot find demand in Europe,” the research house said, quoting a source.
The development adds more pain to the woes of Nigeria, where output hit a multi-decade low of below 1 million barrels a day last year. Already, the nation has struggled to contain incidents of oil theft on a grand scale in the far south which sapped as much as $1 billion from the government’s revenue in the first quarter of the year.
That production level is less than half of the country’s current daily capacity of 2.2 million barrels.
On account of a price ceiling placed on the crude oil from Russia following its war with Ukraine, which has made the grade cheaper, African crude graders are struggling to find patronage from refiners in Asia, outsold by the Urals crude.
READ THE FULL STORY IN PREMIUM TIMES
Connect with us on our socials: