Libya, the only country exempted with Nigeria from OPEC crude oil cuts has pumped more supply of the products to the international market, a situation that has seen Nigerian light oil suffer some price losses and reduced demand.
Though crudes from both countries are at variant, reports of the market monitored by Ripples Nigeria on Sunday said that, ”Libyan first Sharara crude cargo in the first week of January 2017 was the largest in volume for the past two years.”
The development is said to have created a surplus chain likely to undermine oil price benchmarks stability, as being envisaged by OPEC.
Other member countries, including Venezuela and Saudi Arabia,were quoted as having raised the issue as the Atlantic Basin was also oversupplied with light crude oil from some unnamed countries for the first-quota contracts of 2017.
Not helping the matter, some United States-based refineries, capitalising on the supply excess, are said to be stockpiling crude from Libya and Algeria, thereby taking advantage of cheap oil spilling out of the region.
The situation has been confirmed to have created further unhealthy rivalry for West African light crude, of which Nigeria is the leader.
But an official of the Nigerian National Petroleum Corporation (NNPC) said most of the tenders for 2017 crude-for-oil product swap contracts had been entered into with only signing the final legal documents holding.
He said there was an expectation that China’s crude oil demand from Nigeria in 2017 would increase by five per cent from the figure of 2016.
However, there is still the fear that if nothing was done to check Libya and other countries, the price of Nigeria main crude, theBonny Light, will fall from its current $50.2 per barrel.
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