Nigeria importing more petroleum products, boosting global refining

*Petroleum refinery.

*Petroleum refinery.

Oscarline Onwuemenyi,
with agency reports

05 October 2016, Sweetcrude, Abuja – Petroleum refining margins in northwest Europe rose on Tuesday as Nigeria and other regions continued to seek its export cargoes.

Refinery turnarounds in the Middle East, Canada and Europe are limiting supplies of all products, traders said. A move to make more middle distillates in recent months at the expense of gasoline had also helped balance supplies.

In the meantime, Nigeria is said to be importing more petroleum products now as a result of a resumption in exports of crude oil streams that had been closed, enabling the country to swap more oil for gasoline.

The demand for gasoline is also boosting naphtha, which is used as a blendstock. Around 400,000-500,000 tonnes of reformate are expected to ship from Europe to China in October, though stocks are now too high to enable more bookings, traders said.

The Organisation Petroleum Exporting Countries (OPEC) has expressed optimism that Nigeria will begin to import more petrol.

According to a recent OPEC monthly oil market report, Nigeria’s oil production capacity dropped the most among OPEC members, while its gasoline (petrol) import has also been sliding.

The report noted that, “According to secondary sources, OPEC-14 crude oil production (following the rejoining of Gabon on 1 July), averaged 33.11 mb/d in July, an increase of 46 tb/d over the previous month,” the report read.

“Crude oil output increased mostly from Iraq, while production in Nigeria showed the largest drop.”

The organisation says Nigeria’s oil production went to 1.527 million barrels per day in July, from 1.379 million in June.

The oil cartel said the global gasoline (petrol) market continued weakening in July due to a lack of export opportunities, as high inventories reduced interest in imports.

“The gasoline crack spreads continued losing ground in July, as regional oversupply outweighed strong seasonal demand. Additional pressure came from increasing inventories in the region.

“Another bearish factor has been lower export opportunities to the Middle East and West Africa. The gasoline crack spread against Brent saw a drop of more than $4 from the previous month to average around $17.4/b.

“Strong export opportunities to Latin America could lend support to European gasoline, while exports to Nigeria are expected to pick up soon.”

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