Crude oil traders are still reluctant in buying Nigeria’s oil, even when the price is as low as $10 per barrel.
Late on Monday, the nation released the prices for most of its crude oil grades for sale in May. The figures reflect an urgent need to offload cargoes in what is a highly competitive marketplace. Even so, traders cautioned that the prices — $10 a barrel or less if the market doesn’t improve — still may not tempt enough buyers because of the demand collapse triggered by the coronavirus.
Bloomberg observed that, Africa’s largest economy is particularly vulnerable to the oil-price rout that’s been brought about by the disease. The country, which has a fiscal breakeven well above $100 a barrel, mostly sells very light crudes that are low in sulfur — a similar variety to those that the U.S. produces in abundance these days. Worse for Nigeria, it lacks the space to store unwanted supplies at a time the cost of hiring ships to take its supplies to importers has soared because many tankers are being used for floating storage.
Like a lot of oil producing countries, Nigeria sells its crudes at differentials to benchmarks. For the West African country, that marker is Dated Brent, published by S&P Global Platts. The measure stood at $14.68 a barrel on Tuesday.