35 Cargoes of Nigerian Oil Unsold as Buyers Preference Shifts
As rivalry heightens among oil sellers, large numbers of cargoes of oil belonging to Nigeria have remained unsold. Consumers showed a preference for its rival grade instead amidst uncertainties in the market.
An overhang of Nigerian supplies persisted on Friday as trading was slow ahead of the winter holidays, and offer prices were largely steady, a Reuter report said.
Analysts explained that at least 35 cargoes of Nigerian crude for loading in January remained unsold, as competing Mediterranean grades sold more swiftly to European refiners.
It was noted that the impact of instability on the Red Sea shipping corridor was unclear. Costly diversions of cargoes from other markets could have a positive impact on demand for crude from the region but also risk driving up freight and insurance costs.
Elsewhere, India’s International Oil Company (IOC) closed a tender for March-arriving crude but the results had yet to emerge. Offers for Nigerian Qua Iboe crude stood at around dated Brent plus $2 a barrel, traders said.
Crude futures are higher as the market turns its focus back to Red Sea shipping concerns. Benchmark crude prices are on track for a second weekly gain after Angola’s announced exit from OPEC interrupted the rally yesterday.
“The complex is recovering upside today on an apparent need to maintain risk premium related to the Red Sea shipping disruptions,” Ritterbusch says in a note, adding that short-covering ahead of the long weekend is also supportive.
WTI for February delivery is up 0.9% at $74.57 a barrel, and February Brent is up 0.8% at $79.99.
Crude oil prices settled lower in a volatile session, with Angola’s decision to leave OPEC over quota disagreements raising concerns that other members of the group and its allies may not adhere to their announced output cuts.
“On the surface Angola leaving OPEC is not that big of a deal because they can barely pump their oil quota,” says Phil Flynn of the Price Futures Group in a report.
But “Angola’s departure might signal some underlying tension with the fact that the cartel is losing market share to non-OPEC producers and mainly the United States,” he adds.
The EIA reported that U.S. crude oil production was a record 13.3 million barrels a day last week, 200,000 barrels a day more than the previous week. WTI crude for January delivery settles down 0.4% at $73.89 a barrel. February Brent falls 0.4% to $79.39 a barrel.
The number of rigs drilling for oil in the U.S. fell by three this week to 498, and was down by 124 from a year ago, oil services company Baker Hughes reports. Naira Devaluation Deepens Economic Crisis in Nigeria
Rigs drilling for natural gas rose by one to 120, which is 35 fewer than a year before. The EIA reported that U.S. crude oil production rose by 200,000 barrels a day last week to a record 13.3 million barrels a day, and was 1.2 million barrels a day higher on the year.
