- NUPENG Strike, Refineries’ Closure Caused Products Scarcity
The current hiccups in the supply of petroleum products is due to the recent one-day industrial action by the Nigeria Union of Petroleum and Natural Gas Workers and the shutdown of the nation’s refineries, the Nigerian National Petroleum Corporation has said.
Many Nigerians had complained of kerosene and diesel scarcity, with some Abuja motorists on Sunday forming long queues at filling stations.
Two out of the country’s three refineries were completely dormant in November 2016.
Explaining why there had been some problems with products’ supply across the country, the Group General Manager, Group Public Affairs Division, NNPC, Mr. Ndu Ughamadu, told our correspondent on Sunday that things were already improving as the situation was being addressed by the corporation.
He said, “We issued a statement on Friday that one of the implications of the one-day warning strike by NUPENG was that there was no loading from various depots nationwide and that created a slight gap. Loading resumed immediately after the strike was called off and you know if tanker drivers don’t load in a day, the implication is that there may be hiccups here and there. But things are normalising.
“Secondly, the three refineries were down for a couple of weeks and they resumed production about a fortnight ago. They are producing enough diesel now in addition to what we are importing to complement indigenous production; likewise kerosene.
“Many filling stations are now selling kerosene, unlike what we had some 10 days ago, when the stations were not dispensing because the local refineries were not pumping the product. But right now, the three refineries have resumed the production of kerosene and many filling stations have started getting products and are dispensing.”
Meanwhile, the price of Nigeria’s largest crude oil export grade, Qua Iboe, has been slashed in a bid to woo buyers as many cargoes for February loading programme remain unsold.
The country’s oil differentials fell to their lowest in more than a year on Friday as surplus cargoes struggled to find outlets in a market oversupplied with light crude oil, according to Reuters.
Despite an Indian tender absorbing several Nigerian oil grades, around 25 February loading cargoes were still looking for homes less than a week before the next loading programme was due.
Sellers slashed premiums for Qua Iboe to as low as 50 cents per barrel versus dated Brent, with traded values expected below that. Brent crude, the global oil benchmark, was trading around $55.45 per barrel.
After the cuts, Oando and Trafigura managed to sell Qua Iboe cargoes for mid- and end-February loading, respectively. Litasco and Total purchased them at prices that traders said were below 50 cent premiums.
The unreliability of loading plans, with Qua Iboe exports delayed due to strike action late last year, also made buyers less keen to take it.
Bonny Light offers were scarce, but traders said its value was also under pressure along with most of Nigeria’s export programme.
Crude Oil Rises to $72 a Barrel on Strong Demand Recovery
Oil prices rose on Friday to fresh multi-year highs and were set for their third weekly jump on expectations of a recovery in fuel demand in the United States, Europe and China as rising vaccination rates lead to an easing of pandemic curbs.
Brent crude futures edged up 13 cents to $72.65 a barrel to 1145 GMT, a day after closing at their highest since May 2019.
U.S. West Texas Intermediate (WTI) crude futures were up 14 cents to $70.43 a barrel, a day after their highest close since October 2018.
U.S. investment bank Goldman Sachs expects Brent crude prices to reach $80 per barrel this summer as vaccination rollouts boost global economic activity.
The International Energy Agency said in its monthly report that OPEC+ oil producers would need to boost output to meet demand set to recover to pre-pandemic levels by the end of 2022.
“OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” the Paris-based energy watchdog said.
It said that rising demand and countries’ short-term policies were at odds with the IEA’s call to end new oil, gas and coal funding.
“In 2022 there is scope for the 24-member OPEC+ group, led by Saudi Arabia and Russia, to ramp up crude supply by 1.4 million barrels per day (bpd) above its July 2021-March 2022 target,” the IEA said.
Data showing road traffic returning to pre-COVID-19 levels in North America and most of Europe was encouraging, ANZ Research analysts said in a note.
“Even the jet fuel market is showing signs of improvement, with flights in Europe rising 17% over the past two weeks, according to Eurocontrol,” ANZ analysts said.
Africa Oil Week Remains Force of Good for Africa
Hyve Group Plc, organisers of Africa Oil Week have confirmed that business opportunities and discussions at the 2021 edition will remain focused on driving investment into Africa for its sustainable socio-economic development, as it has done for the past 27 years.
The event which will temporarily move to Dubai for 2021 due to COVID-19 restrictions in South Africa will take place on 8-11 November 2021 and has support from key African stakeholders.
Atty. Saifuah-Mai Gray, CEO of National Oil Company of Liberia said “As an oil and gas hub, Dubai represents a huge opportunity for Governments to meet a high concentration of investors with the financial and technical capability to partner in our national upstream”
Africa Oil Week is known for driving deals and transaction across the African oil and gas sector, and after being forced to host the 2020 edition virtually, confirmation that a live event will take place in 2021 has delighted clients.
Miriam Seleoane, Assistant Director at the Department of Trade and Industry and Competition said
“The DTIC has supported the Africa Oil Week for many years. For 2021 we will be taking a delegation of 20+ companies to the Oil Week to advance partnership and investment dialogue between our South African businesses and international partners. Africa Oil Week remains a huge platform for the DTIC and our South African private sector”.
The event will run under the theme “succeeding in a changed market”, and it will be the only large-scale oil and gas event focused solely on Africa to run in person in 2021.
In a previous statement, the organiser cited Dubai as the “next best location” after Cape Town due to the exceptional progress made in the UAE’s vaccination programme. Dubai is also the leading financial centre in the Middle East, Africa and South Asia and presents an opportunity for attendees to meet with new capital holders, further driving investment into Africa.
The 2022 event will return to Cape Town, where organises have said it is the event’s “natural home” and to which they are strongly committed for the long-term.
Crude Oil Rebounds on Thursday After Slipping on U.S Weak Demand
Oil prices rose on Thursday a day after slipping on data indicating weak U.S. driving season fuel demand as investors eyed upcoming U.S. economic data.
Brent crude oil futures were up 18 cents, or 0.25%, at $72.40 a barrel, holding just shy of a high not seen since May 2019.
U.S. West Texas Intermediate oil futures rose 11 cents, or 0.16%, to $70.07 a barrel, staying near its highest since Oct. 2018.
“The market is recovering impressively from yesterday’s dismal weekly EIA report, the drop in weekly gasoline demand was particularly disappointing,” said Tamas Varga, analyst at PVM Oil Associates.
“It will interesting to see whether the monthly OPEC report due out later will confirm last month’s upbeat demand assessment for the second half the year. If it does, as expected, it should support oil prices.”
Varga added that U.S. inflation data and jobless claims would provide more direction on the health of world’s biggest economy and clues as to whether the Federal Reserve might start tapering stimulus.
U.S. crude oil stockpiles that include the Strategic Petroleum Reserve (SPR) fell for the 11th straight week as refiners ramped up output, but fuel inventories grew sharply due to weak consumer demand, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories that exclude the SPR fell by 5.2 million barrels in the week to June 4 to 474 million barrels, the third consecutive weekly drop. But fuel stocks were up sharply, with product supplied falling to 17.7 million barrels per day (bpd) versus 19.1 million the week before.
Implied gasoline demand fell to 8.48 million bpd in the week to June 4, down from 9.15 million bpd from the week before, but up from 7.9 million bpd a year ago, EIA data showed.
Weighing on prices, India’s fuel demand slumped in May to its lowest since August last year, with a second COVID-19 wave stalling mobility and muting economic activity in the world’s third largest oil consumer.
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