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NorthAmOil NEWSBASE’S ROUNDUP GLOBAL (NRG) NorthAmOil
A global perspective in uncertain times
The world’s oil and gas companies are struggling to cope with the fallout from both weaker oil and gas demand and a global supply glut
COMMENTARY
WELCOME the inaugural edition of NewsBase’s Roundup Global (NRG), in which our team of international editors provide you with a snapshot of some of key issues affecting their regional beats.
Amid the continuing fallout from the coro- navirus (COVID-19) pandemic and oil price collapse, it has never been more important to review the oil and gas industry’s big picture.
Upstream and downstream operators, both privately owned and state run, continue to make some tough calls when it comes to project ration- alisation. Their approaches to problem solving now will have a long-lasting impact on the global energy market.
African backlog
Nigeria is reportedly still struggling to reduce its backlog of unsold crude oil cargoes, and it may continue to do so despite another round of price cuts.
According to trading sources, Nigerian National Petroleum Corp. (NNPC) was still seeking buyers for 30 of its 65 May-loading cargoes as of late April. This is an unusu- ally high share of the total for the end of the month, and Nigerian authorities appear to be concerned that the figure is not likely to diminish in the near future.
Accordingly, officials in Abuja have announced plans for further price cuts, in the hope that making Nigerian oil cheaper will make it more attractive. Last week, they took steps that brought prices for Bonny Light and other Nigerian crude grades down to around $10 per barrel as of last week. This put these grades at a discount of nearly $4.00 to Brent crude, which was trading under $15 per barrel at that time. Brent has since moved up to nearly $30 per barrel. It also put the price at a level below the reference rate of $20 per barrel cited in the Nigerian federal government’s budget.
Price cuts may not be enough to make Bonny Light, Qua Iboe and other Nigerian grades attractive to buyers in Europe, where refiners are usually keen to secure steady deliveries of light sweet crude that yields high percentages of gasoline and diesel. Two trading sources told Bloomberg that global energy demand was still so low because of the coronavirus (COVID-19) pandemic that refiners might not be interested in Nigerian crude even if it cost only $10 per barrel.
If you’d like to read more about the key events shaping Africa’s oil and gas sector then please click here for NewsBase’s AfrOil Monitor.
Price cuts may not be enough to make Bonny Light, Qua Iboe and other Nigerian grades attractive to buyers in Europe.
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w w w . N E W S B A S E . c o m Week 19 14•May•2020