Contrary to its earlier promise, Dangote Refinery has reportedly failed to meet the demand of Nigerian petroleum marketers.

Consequently, the oil dealers have returned to their mode of buying the product outside the country and shipping them into Nigeria to sell.

They accused Dangote Refinery of inability to meet their demand, stressing that the need to prevent fuel scarcity forced them into patronising foreign petroleum refiners.

According to them, the development is to supplement the country’s fuel supply.

The old dealers also cashed in on the fair market price to be importing the product following the federal government’s full deregulation of the downstream oil sector.

In September for instance, the marketers imported about 141 million litres of fuel in September.

Investors King gathered that no fewer than four vessels carrying 123.4 million litres of Premium Motor Spirit (PMS) arrived at Nigerian seaports between Friday, October 18, and Sunday, October 20.

In a document by the Nigerian Port Authority (NPA), the four newly shipped vessels landed at the Apapa port in Lagos and the Calabar port in Cross River State.

It was gathered that 35,000, 37,000 and 10,000 metric tonnes of PMS arrived at Apapa port on Friday, October 18 in different batches.

Another 10,000 metric tonnes of fuel was said to have arrived at Calabar port on Sunday, October 20.

Dangote Refinery had promised to produce 650,000 barrels per day to meet its promised production target.

However, oil dealers had earlier disclosed that the refinery was producing only 10 million litres of petrol daily, far below its initial promise of 25 million litres.

The total fuel so far imported into the country stands at approximately 123.4 million litres of petrol if the conversion rate of 1,341 litres to one metric tonne is considered.

Crude oil is up nearly 1% today across both major benchmarks, following a five-day losing streak.

Oil’s gains come after the People’s Bank of China cut interest rates more than expected as part of a series of economic stimulus measures that should support demand prospects for crude.

This comes amid growing signs of further escalation in the Middle East and the lack of a resolution in the horizon, which could keep the door open for a return of the geopolitical risk premium to crude prices.

The PBOC’s cut its Loan Prime Rate for one and five by 25 basis points to 3.1% and 3.6%, respectively. The anticipated move follows a series of previous measures aimed at supporting borrowers, particularly in the struggling housing market.

Despite the market’s welcome of the move, it has been met with skepticism, along with other previous monetary measures, about the effectiveness in supporting the economy. What the central bank is doing alone will not be enough, as demand for credit is still weak in the first place, according to the Wall Street Journal, citing Capital Economics. Significantly restoring economic growth requires large fiscal support, not just monetary support.

As such, I believe that oil’s gains, supported by economic factors from China, may be fragile and subject to rapid reversal.

This move also comes after the slowdown in GDP growth during the last quarter, as well as the slowdown in consumer price inflation and the contraction of producer prices faster than expected, in addition to the continued contraction in house prices, indicating continued weak demand.

In the Middle East, the prospect of regional war looms ever larger, with no signs of de-escalation from Israel, leaving the door wide open for further conflict.

Even after talk of hope for a truce following the killing of Hamas leader Yahya Sinwar, there are no indications of imminent ceasefire talks, and the escalation has actually worsened over the weekend, according to the New York Times.

This optimism emerged after the White House called for an end to the war, but I believe the U.S. administration’s repeated appeals for a truce are not serious.

In Lebanon, Israel has set out its demands for the United States to stop the war there, according to a number of US and Israeli officials who spoke to Axios. These demands include allowing Israel to carry out operations inside southern Lebanon to prevent Hezbollah from reconstituting its forces, as well as the freedom of Israeli flights in Lebanese airspace.

However, these demands will likely be rejected by the Lebanese side and the international community, as they violate Lebanese sovereignty, according to the site. Therefore, a settlement of the ongoing conflict there does not seem imminent with this very high ceiling of Israeli demands.

These demands are similar to those regarding the cessation of the war in Gaza, which has witnessed an escalation of military operations, especially in the northern part of the Strip, which comes after increasing reports of the intention to empty the north of its population, which contradicts the efforts to resolve the conflict.

In the region as well, markets are anticipating an Israeli attack on Iran in response to the unprecedented missile attack. Republican Representative Lindsey Graham said in an interview that this attack will be soon and strong.

Oil market has adjusted its pricing for concerns about the safety of regional oil supplies following a report from The Washington Post last week, indicating that Israel will refrain from targeting Iranian oil facilities. This decision aligns with the U.S. administration’s demands, given the potential impact of such an attack on rising oil prices coinciding with the start of the presidential race.

However, I believe that the Israeli attack will be met with an Iranian counter-response, which leaves the door open to targeting oil interests in the region in the next rounds of escalation that will come after the end of the elections, which may reignite rapid spikes in crude price in the coming weeks. While this supply disruption could push crude prices to $80 and even $120 per barrel, according to Citi Research’s estimate published last week.

By Samer Hasn, Senior Market Analyst at XS

Chevron Nigeria Limited has found a new oil field in the shallow offshore area of the Western Niger Delta.

The new oil field was estimated to hold 17,000 barrels of oil per day.

Chevron, one of Nigeria’s biggest oil producers, works with the Nigerian National Petroleum Corporation (NNPC) in a joint venture to manage onshore and offshore assets in the region.

According to the report, the new field was discovered in the Meji NW-1 within Petroleum Mining Lease 49.

It was noted that the drilling was approximately 8,983 depth and 690 feet of hydrocarbons within Miocene sands when the crude was discovered.

The new field is expected to boost Nigeria’s overall crude oil output, address production decline challenges of the petroleum sector, and improve service to Nigerians.

It would also enhance Nigeria’s job creation by employing individuals to work on the field.

“This accomplishment is consistent with Chevron Nigeria Limited’s intention to continue developing and growing its Nigerian resources, including the onshore and shallow water areas,” the report stated

“It also supports Chevron’s broader global exploration strategy to find new resources that extend the life of producing assets in existing operating areas and deliver production with shorter development cycle times,” the report added.

Before this discovery, S&P Global Commodity Insights data showed a drop in oil production from the Meji field. The data revealed that daily crude oil output fell from 51,000 barrels in 2005 to 17,000 barrels in 2024, representing a 66.67% decrease.