Falling Oil Prices, Lower Exports, Rise of U.S. Condensate Shipments Pose Triple Whammy for Nigeria

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Nigeria's oil export woes continue to mount as the price of Brent crude hovers under $50 a barrel. Statistics for the second half of 2014 show that markets were contracting even before the oil price fell off the cliff. As income from oil exports is the mainstay of the country's revenue, worse news continues to follow the bad news.

For related information, see December 11, 2014, article - Falling Oil Prices Could Cost Nigeria $24 Billion in 2015.

The fall in oil prices, which began in June 2014 when prices were at $115 per barrel, has continued affecting key export markets.

According to the latest monthly report from the Nigerian National Petroleum Corporation (NNPC) (Abuja, Nigeria), exports to Europe, Nigeria's biggest regional market, fell to 29.2 million barrels in September from 33.6 million barrels in August 2014.

The Asian market, which is the major target for many oil exporters, reduced its import of Nigerian crude by 4.4 million barrels in September. India, which has replaced the U.S. as Nigeria's largest market, reduced imports of Nigerian crude in September by 3.1 million barrels.

According to NNPC data, total oil exports from the country declined to 67.1 million barrels in September from 70 million barrels in August 2014. Europe, Africa, Asia and the Far East are the major destinations for Nigerian crude and condensate exports.

Increasing shale oil production in the U.S. hit Nigerian crude imports hard, and now the Obama administration is expected to launch a wave of ultra-light shale oil condensate onto global markets, with Asia as a key target. It is estimated that the entry of U.S. oil producers in global markets will increase global supplies by as much as 1 million barrels a day by the end of 2015.

For related information, see October 6, 2014 article - U.S. Imports of Nigerian Crude Plummet to Zero in Short Time.

The Nigerian market was reported to have remained oversupplied, with about 20 million barrels for January still available, plus almost the entire February production program. Traders said that crude values were expected to fall, especially with such weak buying interest from Asian and European refiners.

Nigeria's flagship crude grade, Qua Iboe, has been pegged at about 50 cents above the ruling daily Brent oil price, which dipped under $50 a barrel this week.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.