Global oil traders are currently awaiting the release of Nigeria’s crude oil lifting programmes for May and June 2020 to guide their decisions, following many choices presented by excess supplies and low prices.
Investigation by Vanguard showed that the Nigerian National Petroleum Corporation, NNPC, had discussions with different stakeholders, including the International Oil Companies, IOCs and their indigenous counterparts.
It was gathered that further consultations, targeted at reaching an agreement on output allocation of the 1.42 million barrels per day, mb/d to be produced by Nigeria in line with OPEC directive in May and June 2020 was slightly delayed by the Coronavirus pandemic.
The Group Managing Director, NNPC, Mallam Mele Kyari could not be reached yesterday, but a source in the Ministry of Petroleum Resources, who preferred not to be named because he was not permitted to speak, said: “The Ministry of Petroleum Resources is aware of the ongoing consultation on output cut and compliance. Remember the Minister of State for Petroleum Resources, Chief Timipre Sylva, who led the nation’s team to the recent meeting of the Organisation of Petroleum Exporting Countries, OPEC is in full support of the compliance.”
Traders express worry
He added: “There is a need to carry everyone along. We are sure that it would soon be concluded. Thereafter, Nigeria’s loading programmes for May and June 2020 would be released to guide market operators.”
Meanwhile, a source in the London market, said: “Traders are worried about the delay of Nigeria’s oil lifting programmes for May and June 2020. But they would have to wait for them.”
Why prices drop
However, in an interview with Vanguard, Prof. Omowumi Iledare, the Ghana National Petroleum Corporation (GNPC) Professorial Chair in Oil and Gas Economics and Management, Institute for Oil and Gas Studies, University of Cape Coast, said: “There are many reasons for this fall in price and they are all related. Primarily, Coronavirus created a global shutdown of economic activities that are extremely depended on oil consumption. Then, key producers, US, Saudi Arabia and Russia kept pumping oil.
“Excess supply led to high inventory, which created significant equilibrium and price fell drastically as inventory built up. The slow response to decrease supply under disappearing global economic activity due to the virus is why we are where we are.”
He said: “In the short run, prices will continue to fall until it begins to rise when inventory is depleted or nearly so. Nevertheless, that depends on whether OPEC + reduces production dramatically.
Source:
Vanguard
Investigation by Vanguard showed that the Nigerian National Petroleum Corporation, NNPC, had discussions with different stakeholders, including the International Oil Companies, IOCs and their indigenous counterparts.
It was gathered that further consultations, targeted at reaching an agreement on output allocation of the 1.42 million barrels per day, mb/d to be produced by Nigeria in line with OPEC directive in May and June 2020 was slightly delayed by the Coronavirus pandemic.
The Group Managing Director, NNPC, Mallam Mele Kyari could not be reached yesterday, but a source in the Ministry of Petroleum Resources, who preferred not to be named because he was not permitted to speak, said: “The Ministry of Petroleum Resources is aware of the ongoing consultation on output cut and compliance. Remember the Minister of State for Petroleum Resources, Chief Timipre Sylva, who led the nation’s team to the recent meeting of the Organisation of Petroleum Exporting Countries, OPEC is in full support of the compliance.”
Traders express worry
He added: “There is a need to carry everyone along. We are sure that it would soon be concluded. Thereafter, Nigeria’s loading programmes for May and June 2020 would be released to guide market operators.”
Meanwhile, a source in the London market, said: “Traders are worried about the delay of Nigeria’s oil lifting programmes for May and June 2020. But they would have to wait for them.”
Why prices drop
However, in an interview with Vanguard, Prof. Omowumi Iledare, the Ghana National Petroleum Corporation (GNPC) Professorial Chair in Oil and Gas Economics and Management, Institute for Oil and Gas Studies, University of Cape Coast, said: “There are many reasons for this fall in price and they are all related. Primarily, Coronavirus created a global shutdown of economic activities that are extremely depended on oil consumption. Then, key producers, US, Saudi Arabia and Russia kept pumping oil.
“Excess supply led to high inventory, which created significant equilibrium and price fell drastically as inventory built up. The slow response to decrease supply under disappearing global economic activity due to the virus is why we are where we are.”
He said: “In the short run, prices will continue to fall until it begins to rise when inventory is depleted or nearly so. Nevertheless, that depends on whether OPEC + reduces production dramatically.
Source:
Vanguard
