Nigeria Clears Additional Backlog of January Crude Oil Cargoes

* NUPRC seeks collaboration to mitigate methane emissions

Emmanuel Addeh in Abuja

Nigeria is making headway in finding customers for its January cargoes, with 10 to 12 cargoes left, out of an estimated 20 earlier in the week, a trader has told Reuters.
This is coming as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said that Nigeria is poised to receive substantial support in its endeavour to mitigate methane emissions originating from the oil and gas sector.
However, at this stage of the trading cycle, this is still a considerable overhang, given the fact that there are February-loading cargoes also still on offer, while the country’s March programme is expected in the coming weeks, the report said.

Premiums for Nigerian crude oil have begun to fall, as competition from Saudi Arabia heats up.
Offers for the grade Qua Iboe are in the range of dated Brent plus $1.5 a barrel for January loading, while the same grade is being offered at dated Brent plus $1 a barrel for February loading, another trader added.
Also, the report added that only about 10 cargoes of Angola’s February-loading cargoes are left, out of the 32 scheduled for loading, a trader said earlier this week. Angola’s March programme is expected to emerge next week.

Also, a new report by Deloitte has projected that energy trends estimate global oil prices will be stuck at low levels for the next couple of years.
The analysis predicts an average West Texas Intermediate (WTI) price — typically regarded as the benchmark for crude oil — of $72 US per barrel this year.
That depression in price is because of cuts from major producers, record production in the United States and slowing growth in demand, according to the report.
Oil prices are at their lowest in two years, with prices hovering around 2021 levels.

“We do have a lot of production out there, and money spent by energy companies in 2023 is bringing lots of volumes out there, and maybe we’re a little bit more resource and supply-heavy than we were last year,” said a partner at Deloitte, Andrew Botterill,   who leads the energy and chemicals file.
The Organisation of the Petroleum Exporting Countries (OPEC) recently decided to cut 2.2 million barrels a day in the first quarter of 2024.
Demand is forecast to increase by about 1 million barrels per day in 2024, compared with 1.6 million last year, per analysis by the US Energy Information Administration.

“It’s the pendulum of this energy industry. When prices are high, money is spent. And then, of course, when those volumes come on, things will soften a little bit. So I think this is a little to be expected from where we were,” he stressed.
Deloitte forecasts the average WTI price will remain low through 2026 before rebounding slightly in the years leading up to 2030 — however, prices still aren’t expected to climb over $80 a barrel.

While lower oil prices may leave the province readjusting its budget, Botterill said consumers can do a version of the same exercise.
Meanwhile, the NUPRC has said that Nigeria is poised to receive substantial support in its endeavour to mitigate methane emissions originating from the oil and gas sector.

Stressing that this will be partly achieved through a collaboration between the country and the Climate and Clean Air Coalition, it stated that the partnership signifies a significant step towards addressing environmental challenges associated with the energy industry.
The industry regulator added that methane, a potent greenhouse gas, has been a growing concern globally, and the partnership was tailored to bolster Nigeria’s initiatives in curbing its impact on climate change.

“As a prime regulator in Nigeria’s oil and gas sector, the NUPRC is set to leverage the expertise and resources of the Climate and Clean Air Coalition.
“This collaboration that encompasses a multifaceted approach, including knowledge sharing, technological support, and joint research efforts, is aimed at devising effective methane mitigation strategies.
“The Climate and Clean Air Coalition, renowned for its dedication to air quality and climate-related initiatives, is bringing its wealth of experience to the partnership,” the NUPRC stated in a note.