Outlook Bearish for Nigerian Crude: Platts

Nigerian crude is not looking particularly bullish, with around 10m bbl of unsold crude scheduled to load in May, dampening activity for June barrels too, according to Platts Oil Podcast.

• Nigeria’s flagship grade Bonny Light was at a 55 cents/b premium to Brent May 14, compared to a $3/b premium two months ago, Platts said.
• Medium sweets such as Forcados are also seeing differentials narrow by nearly $3.50/b in the last two months.
• The driving factor is both refinery maintenance in Europe, weakening refinery margins in the region, and competitiveness among light sweet grades.
• WTI is particularly competitive against Nigerian grades at present, Platts added.
• Another issue is deferred demand, with May barrels being rolled over into June and creating a cycle of pricing pressure.
• The only real supportive factor for Nigerian crudes is freight costs, with current rates quite manageable for FOB loadings. However, it doesn’t seem to be providing a floor.