Export programmes for West African crudes emerged on Friday and showed lower volumes for this month and the next, in line with unprecedented output cuts by producers and a lack of demand.
Royal Dutch Shell circulated its export schedule for June loadings of Nigerian Bonny Light and Bonga crude, with the former set to fall sharply in June to 190,000 barrels per day (bpd) from 245,000 planned for May.
Loading plans have been disrupted as Nigeria has haggled with international majors on cutting output following a pact by OPEC+ producer countries to limit supplies to prop up global oil prices, effective from May 1. One Bonny Light cargo from Shell originally schedule for June 1-2 export was delayed to June 7-8.
Volumes for the four major grades tracked by Reuters are set to plunge to 602,000 bpd from 828,000 originally planned in May, though those volumes, along with those of other grades, have been reduced because of downward revisions to the May schedule.
The June exports of the grades are more than a third lower than volumes planned for March, circulated before lockdowns to contain the outbreak of the novel coronavirus went widely into force. Market sources linked the fall to the producer supply cut pact and to record low prices for West African grades.
A rally in Brent crude prices this week from more than two-decade lows below $20, combined with major producer Norway’s plans to cut output for the first time in nearly 20 years helped to boost differentials.
Many sellers of West African crude remained pessimistic, however, saying an overly sudden rise to the dated Brent benchmark from which West African grades are priced could undermine the contango market structure, which was one of the few factors buoying sales.
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(Reuters)
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