Chevron,ExxonMobil, Shell, and the Nigerian National Petroleum Corporation (NNPC) recorded bullish transactions for Nigeria’s crude grades in several deals that reduced the number of unsold Nigerian November crude cargoes.
Checks by New Telegraph showed that these deals that coincided with soaring oil prices above $62 per barrel at the global market signaled more revenues for the country that depends largely on crude proceeds to service over 85 per cent of its budget.
The multi-national oil firm that took active part in the transactions includes Royal Dutch Shell, Chevron Plc and ExxonMobil Plc through their subsidiaries in Nigeria.
Aside from the dwindling number of unsold Nigerian November crude cargoes, the December cargoes too, are already finding buyers, according to loading schedule for the month.
Firm differentials for Mediterranean light, sweet crude are lending the Nigerian market support, Reuters, which confirmed the bullish transaction for Nigeria, said in a report, quoting a trader.
Chevron bought a Bonga cargo from Shell and Exxon was heard to have bought a Bonny cargo, a trader said. Further details were not available.
Differentials looked stable to a bit higher. Qua Iboe was last heard on offer at dated Brent plus $1.30 a barrel, five cents higher than a level reported earlier.
Indian Oil Corporation was also heard to have bought a cargo of Escravos in a prompt tender.
Nigeria’s earnings from crude oil and gas and its Petroleum Profit Tax and Royalties saw a decline of 34.1 per cent for the first quarter of 2016, a period when the price rout hit hard, the country’s coffers, according to data released from the Central Bank of Nigeria (CBN).
In the bank’s Economic Report for the First Quarter of 2016, the nation earned N396.47 billion (currently $1.4 billion), as opposed to N601.52 billion ($2.15 billion) in the last quarter of 2015.
The CBN report said that the drop in receipts from oil and gas exports contributed to the decline in oil revenue. The decrease in exports was due to the drop in oil prices internationally, and the “shut-ins and shut downs” at some NNPC terminals due to vandalism.
Meanwhile, oil price hit $62 per barrel last weekend as Organisation of Petroleum Exporting Countries (OPEC) signals deal, supply threats mount in Nigeria.
Brent for January settlement added $1.45 to end the session at $62.07 on the London-based ICE Futures Europe exchange.
Oil closed at its highest in more than two years for a second day as support grew for OPEC to prolong output cuts, while supply threats abounded.
Futures jumped two per cent in New York, closing above $55 a barrel for the first time since July 2015. While resumption of attacks by Nigerian militants and Venezuela’s debt woes imperil crude output from two of the world’s chief suppliers, the overarching bullish factor remained the increasing prospects for an extension of the OPEC-led curbs to be decided as early as this month. In the U.S., oil rigs declined by the most in over a year, and WTI surpassing last Thursday’s intraday high also provided upward momentum later in the session.
West Texas Intermediate for December delivery advanced $1.10 to settle at $55.64 a barrel on the New York Mercantile Exchange and climbed for a fourth week. Total volume traded was about 13 per cent below the 100-day average.
The global benchmark traded at a premium of $6.21 to January WTI.
This is the second time that good news about oil transactions emanated on Nigeria.
The world apex bank had earlier raised the hope of surplus for 2018 budget through oil price recovery for Nigeria as it projected a surge in commodity’s prices to $56 a barrel in 2018 from $53 this year.
The Federal Executive Council (FEC) had, penultimate Thursday, approved the draft budget estimates for 2018.
Minister of Budget and Planning, Udoma Udoma, who revealed this at the end of FEC meeting at the presidential villa, Abuja, maintained that the President would soon lay the appropriation before the National Assembly.
The economy of Nigeria, Africa’s biggest crude exporter, has been hit drastically by falling prices of oil, its biggest revenue earner. The country, which depends largely on proceeds from crude to service over 85 per cent of its budget, has therefore, been working hard with other members of the OPEC to ensure price recovery for oil.
The World Bank, however, said in a forecast released recently that the prices for oil would average $56 per barrel in 2018.
The forecast contained in the latest report of the global apex bank was predicated on steadily growing demand, agreed production cuts among oil exporters and stabilizing United States (U.S.) shale oil production, while the surge in metals prices is expected to level off next year.
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