Nigeria has been unable to fully reap the benefits of increasing crude oil prices at the international market, as market report says there were about 30 oil cargoes yet to find buyers at the international market.
Market data report obtained from Reuters, said as of Tuesday, between 20 and 30 crude cargoes for November were without buyers, far more than was typically expected to be left over at this stage of the trading cycle.
The market is “very, very sluggish,” another trader said: “The market is going down, margins look bad,” the report said quoting trading sources.
Although some of Nigeria’s crude grade such as Bonga crude was offered at a premium of $9 a barrel to the benchmark dated Brent, while Escravos and Forcados were on offer in excess of $8 in October, however, the report said freight rates have since jumped and refiners’ profit margins have narrowed, weighing on demand.
The low demand had in turn caused the country’s crude grades to fall by $1 to $2 a barrel, traders said.
Crude oil prices in some of the world’s main physical markets have weakened due to a jump in freight costs and a drop in refining margins, according to traders and London Stock Exchange Group data, suggesting demand weakness that could filter through to the futures market.