Tuesday, September 10, 2019

More Nigerian crude oil heads to United State

Nigeria’s crude oil, displaced by the United States’ shale, is making inroads into the US West Coast.

The shale boom has upended the global market, turning the US from a keen buyer of Nigerian oil to an aggressive competitor.

But no pipelines easily connect the shale hub at the Permian basin, located in Texas and New Mexico, to the West Coast, driving the latter to look to Nigeria to quench its thirst for crude, according to Reuters.

Early this year, Californian refineries began loading Nigerian oil- taking cargoes of Qua Iboe, Bonga, Erha, Forcados and others, according to traders and Refinitiv Eikon data.

The more than six million barrels that the US West Coast imported from Nigeria between April and August this year was almost four times higher than the amount for all of 2018.

The route is relatively rare for cargoes that must weather the 20,000-km (12,500-mile), 40-day journey from Nigeria’s lush coasts, around South America’s Tierra del Fuego and up to Los Angeles.

Marathon Oil at its Long Beach refinery has been the most consistent buyer, with another very large crude carrier full of Forcados oil departing Nigeria on Thursday.

Reuters reported that price offerings for Nigerian light sweet crude had eased in recent days, traders said, as refining margins for European petrol finished the week sharply down.

European refiners sought to offload petrol tailored to summer specifications and cracks ended the week down on Friday.

Asking prices for major grades had eased, traders said, with Bonny Light edging well below a premium of $3.00 compared to dated Brent.

Traders said the differentials were still too high to justify purchases, as North Sea crude provided affordable competition.

In a related development, oil prices rose on Monday after the Saudi Arabia confirmed expectations that there would be no radical change in its oil policy.

The global benchmark, Brent crude, increased by $1.18 to $62.72 per barrel as of 8.10pm Nigerian time.(Punch)

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