Bitumen price in Nigeria
Bitumen price in Nigeria
In this article, we will look through the oil market and bitumen price in Nigeria. Unfortunately, the oil market is collapsing in Nigeria,
according to the reports. The price of one of the Nigerian oil indexes, Bonnie Light,
has fallen to $ 12 to $ 13 per barrel. This shows the gap between the country’s oil and the Brent oil index. Moreover, Brent crude traded at $ 28 a barrel on Friday.
Oil market and bitumen price in Nigeria
Europe, West Africa’s oil market,
has been shut down to fight the Coronavirus. Even with the sharp drop in oil prices, old Asian buyers do
not want African oil shipments because they have to pay for shipping costs and do not need these
barrels to reduce demand. This is especially challenging for Nigeria, which has little room to store crude oil. Therefore, they store this extra oil on the ships.
It’s good to know that the price of oil is much less than $ 22 per
barrel in Nigeria and even much lower than the budget needed to balance its budget, which is at $ 133 by the Fitch Institute. Half of the Nigerian government’s revenue comes from oil sales. If Nigeria fails to find the ships it needs for its oil,
its reserves will soon deplete.
More on the oil and bitumen price in Nigeria
Generally speaking, West African oil traders say about 10 million barrels of the region’s oil has not yet been sold in April,
with only 13 days left until the end of the month. This indicates the very low speed of oil sales. Most of the unsold oil comes from Nigeria rather than Angola, and the reason is
that old buyers in Europe have stopped buying because of declining demand.
Additionally, Nigeria produced 1.412 million barrels per day in May and
June and plans to produce 1.495 million barrels per day from July to December 2020 and 1,579
between January 2021 and April 2022 in order to comply with the production reduction agreement.
As a matter of fact, this amount of production, in addition to producing 360 to 460 thousand barrels per day of gas condensate,
is exempt from the production reduction contract.
According to the Nigerian Ministry of Petroleum, the country has forced its oil producers to reduce their oil production by
441,000 barrels per day, which equates to 13.67 million barrels per month.
According to trade sources, Nigerian light crude oil currently sells for $ 5 a barrel cheaper than Brent oil,
while under normal circumstances it is usually $ 3 a barrel more expensive than Brent.
Due to the Nigerian Ministry of Petroleum,
the country has to reduce its production even without an OPEC contract because oil reserves have
increased due to declining demand and there is no room to hold it.
