Demands for Nigerian Oil Drops as Buyers Shun Nigerian Crude Oil

Crude oil buyers in Europe and Asia are shunning Nigerian crude oil for discounted US crude presently flooding the oil market.

According to crude oil traders, the flow of US crude into Europe is gradually displacing the region’s traditional light, sweet crudes, forcing sellers of both Nigerian and Mediterranean crudes to discount September-loading cargoes.

On Wednesday, S&P Global Platts quoted traders as saying that the spot market for September-loading cargoes from Nigeria had not seen activity for more than two weeks.

The traders said buyers in Europe were waiting for offers to drop further, guaranteed by the absence of Asian interest and generally drop in demand for the Nigerian Qua Iboe and Bonny Light.

One of the market sources said “Sellers are in a looking-for-bids mode…they don’t see any demand at all,” referring to Qua Iboe, which has been under-performing due to its higher light end cut.

“Light crudes are really taking a step down with ample Midland around,” another trader said, pointing to the length still available on Nigeria’s 1.5 million bpd September programme, and with just a week to go before October trading would usually commence.

“All the grades are competing…nothing is moving,” another source said.

Brent Crude oil, against which Nigerian oil is priced, rose to $45 per barrel on Wednesday following lower than expected oil inventories from the US. However, OPEC revised the projection stalled price from advancing further on Thursday.