Nigeria is struggling to find buyers for its crude oil due to a shortfall in demand from Europe, Bloomberg is reporting.
According to a report on Friday, strikes in the French refining sector and seasonal maintenance at plants in other parts of Europe reduced the country’s sales.
About 20 to 25 shipments of Nigerian crude for April loading are still seeking buyers, according to four traders specialising in the West African market.
The traders said it is a considerably weaker position than normal for this time of the month — when trade should be moving on to May’s barrels — and the prices the shipments can fetch are plummeting.
Each cargo is said to be about a million barrels of crude.
According to the report, France, one of Nigeria’s biggest buyers, purchased an average of 110,000 barrels a day from the African country over the past year.
However, the publication said a nationwide dispute in France, over pension reforms, according to Wood MacKenzie, has plunged crude imports — thereby shrinking the European country’s demand for Nigerian oil this month.
Also, over 80 percent of France’s 1.1 million barrels-a-day processing capacity has been suspended or is in the process of being shut down due to the industrial action, data compiled by the publication showed.
In addition to the strike’s impact, traders said other plants in Europe are also purchasing less crude because of seasonal maintenance.
“Capacity is offline at some typical destinations for Nigerian crude such as Spain’s San Roque refinery and Italy’s Sarroch plant. Facilities that have halted capacity for work also include Shell Plc’s Pernis refinery near Rotterdam, Europe’s biggest plant,” Bloomberg said.
Also, the report said Mediterranean refiners can choose to skip Nigerian supply in favour of “cheap North African barrels that ship more quickly to the region, or they can process some of the large volumes of US West Texas Intermediate crude that have been arriving in Europe in recent months”.
“Long-haul buyers like Indian Oil Corp. and Indonesia’s Pertamina have been taking more discounted Russian volumes this year, easing their need for Nigerian supply,” the report said.
The publication said another reason for the unsold glut has been Nigeria’s resumption of crude production — which was halted in recent months by theft and technical issues — such as the Bonny Light stream.
[TheCable]