*Crude oil vessel.
OpeOluwani Akintayo
Lagos — Nigeria continues to lose more market share to the United States as shale crude oil production keeps rising.
The United States has now joined Nigeria in production of the light, sweet grades that are ideal for refining into gasoline, making it more difficult for Nigeria to sustain its once-booming market.
The shale oil now competes Nigeria’s traditional strongholds in Western Europe, India, and Indonesia.
Trading statistics say Nigerian oil suffers the slowest sales of the year in this month, with an oversupply so far this year, recording about 25 cargoes every month as against about 20 other years.
According to IHS Markit, Europe has imported around 46% of Nigeria’s oil since the beginning of 2019, India nearly 18%, and the rest of Asia about another 10%.
Nigeria has as many as forty cargoes for export in August- there would be an overhang to be added to its preliminary programme for September exports beginning on Jul. 18.
Although the excesses are beginning to clear up, thanks to major oil companies who absorb them into their own refining systems.
However, unlike Nigerian grades sold for over $2.00 dated Brent in the past, are now being offered below $2.00.
President of the United States, Donald Trump has said the country is on its way to “energy dominance”, as the country’s jumped by 260,000 barrels per day in June to a monthly record of 3.16 million bpd. The country now exports more energy than was obtained in the past.
Nigeria’s crude oil has now been faced out from the U.S market due to shale boom. Exports to the United States dropped to zero for three weeks in July, according to the U.S. Energy Information Administration, EIA.
A fire and explosion on June 21 had shut down one of Nigeria’s consistent buyers, the Philadelphia Energy Solutions, PES refinery.
Up to two month’s worth of light sweet oil, or about 20 million barrels, from West Africa and the North Sea which had been scheduled to arrive there were rerouted elsewhere and sold at way cheaper prices.
However, in an interview with Reuters, NNPC’s GMD, Mele Kyari, said Nigeria has nothing to fear as buyers would not lose interest in its crude soon.
“I think the advantage we’ve had is the quality of our crude,” he said. “We know (buyers) will come,” he said.
IEA says oil demand growth at lowest since 2008
However, Nigeria is not the only affected country with low demand as the International Energy Agency, IEA said on Friday, that global demand fell by 160,000 barrels per day in May, blaming it on the U.S.-China trade war.
“The situation is becoming even more uncertain … global oil demand growth has been very sluggish in the first half of 2019,” the IEA said in its monthly report.
According to the agency, from January to May, oil demand increased by 520,000 bpd, the lowest rise for that period since 2008.
“The prospects for a political agreement between China and the United States on trade has worsened. This could lead to reduced trade activity and less oil demand growth,” the IEA said.
It then lowered its global demand growth forecasts for 2019 and 2020 to 1.1 million and 1.3 million bpd, respectively.
Demand growth in the United States and India was just 100,000 bpd from January to June, it said.
“The outlook is fragile with a greater likelihood of a downward revision than an upward one,” the report said.
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