ABUJA — Despite the seeming
resolution of the conflict between the Federal Government and oil marketers
over the petroleum subsidy claims payment, data, yesterday, showed that
Nigeria’s fuel import has remained low due to oil marketers’ apathy.
This came as Nigeria’s crude oil
export received a boost, as a Canadian crude oil refining company, Come By
Chance Refinery has purchased one million barrels of Nigeria’s Qua Iboe crude
grade.
Oil trading sources, according to a
report obtained from a global provider of energy and metals information and a
source of benchmark price assessments in the physical energy markets, disclosed
that imports into Nigeria, about one million metric tonnes (mt)/month making it
the region’s largest importer of gasoline, continued at a trickle, due to
little guidance from the government.
The sources stated that importers
and distribution companies were seeking more solid assurances over the payment
of the outstanding subsidy, adding that the refusal of the oil marketers to
resume import is a signal that the deal between them and the Federal Government
had failed to restore confidence.
The report stated that arbitrage
from Northwest Europe to West Africa has acquired increasing importance in
recent months, as structurally shrinking arbitrage opportunities to the US
Atlantic Coast and the Persian Gulf have limited outlets for Europe’s net-long
gasoline market.
A European trading source disclosed
that trading of Northwest European gasoline cargoes to West Africa had been
quiet, adding that nothing has been done recently.
Meanwhile, data obtained from Reuters
showed that Come By Chance’s crude oil purchase, the first in at least a
decade, arrived the refinery aboard a Bahamas-flagged ship named M.V. Jiaolong
Spirit.
The purchases, the report stated,
come as West African crude producers are courting new suitors in the face of
weak demand from a U.S. market awash with cheaper, domestic crude.
According to the report, the search
for new buyers has forced West African producers to compete aggressively on
price, so light sweet Nigerian crude grades like Qua Iboe are being heavily
discounted relative to global benchmark Brent crude.
Commenting on the development, Sara
Emerson, a Managing Principal at ESAI Energy said, “I suspect the West African
crude is priced to sell given the continuing reduction in U.S. imports of light
sweet African crude.”
Another source familiar with the
refinery’s operations stated that the crude’s relatively cheap price has drawn
interest from the 115,000 barrel-per-day Come By Chance refinery, adding that
the refinery has made one additional purchase of Nigerian crude.
The report said Nigerian deliveries
are the latest sign of a new approach to crude supply by the recent owners of
Come By Chance, a team of veteran oil traders including Neal Shear, former
commodities banker at Morgan Stanley and ex-Lehman Brothers executive Kaushik
Amin, who purchased the refinery in November.
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