Economic Crisis Looms Around Nigeria as Buyers Shun the Country's Crude Oil
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The economic woes in Nigeria are set to increase as buyers in the international market have shunned the Nigerian crude thereby posing a huge impediment to the generation of foreign exchange in the country.
Nigeria’s economy faces significant risks in the days ahead, as the country is currently having difficulties getting buyers for its crude oil in the international market, even as the price of its various oil grades have been on a downward trend over the last couple of months.
Data obtained from global energy information providers, revealed that Nigeria is currently recording supply glut in the sales of its crude, as buyers seem to prefer other competing grades from other countries.
Analysts are of the view that unless an improvement is recorded in the days and weeks ahead, the Nigerian economy would be plunged into a financial quagmire, as it would be starved of funds to fund its budget and manage the affairs of the country.
Specifically, a Reuters data indicated that Nigeria had been only able to get buyers for 22 of its 62 December 2015 loading cargoes, leaving around 40 cargoes of nearly every grade of its crude still unsold.
The data said that Qua Iboe was better supported, having cleared most of its December loading cargoes, while other grades, including Forcados, Bonny Light, and Escravos were under substantial pressure.
However, in Angola, Nigeria’s fierce competitor, Reuters said there were still at least eight cargoes from the December programme looking for buyers, including Pazflor and CLOV.
Platts, on the other hand, said Nigerian crude oil market remained under pressure, as many grades have lost around $1 per barrel in value since the start of October, especially as an abundance of sweet crude and high freight rates have failed to excite interest from refinery buyers.
The loss of value was attributed to a number of factors pressure from high freight rates, competing Mediterranean and North Sea grades and general weakness in refinery margins, which have improved over the past week but not enough to counteract the glut of sweet crude.
Data obtained from global energy information providers, revealed that Nigeria is currently recording supply glut in the sales of its crude, as buyers seem to prefer other competing grades from other countries.
Analysts are of the view that unless an improvement is recorded in the days and weeks ahead, the Nigerian economy would be plunged into a financial quagmire, as it would be starved of funds to fund its budget and manage the affairs of the country.
Specifically, a Reuters data indicated that Nigeria had been only able to get buyers for 22 of its 62 December 2015 loading cargoes, leaving around 40 cargoes of nearly every grade of its crude still unsold.
The data said that Qua Iboe was better supported, having cleared most of its December loading cargoes, while other grades, including Forcados, Bonny Light, and Escravos were under substantial pressure.
However, in Angola, Nigeria’s fierce competitor, Reuters said there were still at least eight cargoes from the December programme looking for buyers, including Pazflor and CLOV.
Platts, on the other hand, said Nigerian crude oil market remained under pressure, as many grades have lost around $1 per barrel in value since the start of October, especially as an abundance of sweet crude and high freight rates have failed to excite interest from refinery buyers.
The loss of value was attributed to a number of factors pressure from high freight rates, competing Mediterranean and North Sea grades and general weakness in refinery margins, which have improved over the past week but not enough to counteract the glut of sweet crude.
Source: Vanguard
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