11 February 2018, Sweetcrude, Lagos — Data obtained from the Organisation of the Petroleum Exporting Countries have shown that Nigeria’s crude grade, Bonny Light, increased by $1.58 in January.
According to OPEC’s Monthly Oil Market Report, MOMR for January, the $1.58 jump represents a 2.5% rise, pegging price at $64.16/b in the month.
Other crude grades that increased to same price last month included Saharan Blend, Es Sider, Girassol, Equatorial Guinea’s Zafiro and Gabon’s Rabi.
The report attributes the increase in price of the light sweet crude Basket components from West and North Africa to the closure of the Forties Pipeline System in the North Sea due to a crack, causing their value to jump to near $65/b.
New tenders to buy oil and problems that limited exports from Libya and the North Sea, also supported the increase in price of the light sweet West African oil.
Medium and heavier grades had less of a boost, but low freight rates underpinned their premiums to Dated Brent, while Latin American OPEC Reference Basket, ORB components, Venezuelan Merey and Ecuador’s Oriente edged up marginally to $56.04/b and $59.66/b in December gaining 18¢, or 0.3%, and 43¢, or 0.7%, respectively.
According to the report, tight sour crude supplies in the United States Geological Survey, USGC, amid considerably lower imports of heavy sour crudes from OPEC Member Countries and lower Canadian supplies, continued to support these grades, albeit to a lesser degree this month.
Supported by tighter supplies, OPEC said healthy demand and the uplift in Official Selling Price, OSP offset the value of multiple-region destination grades, Arab Light, Basrah Light, Iran Heavy and Kuwait Export improved further.
On the average, these grades’ values expanded by $1.40, or 2.3%, for the month to stand at $61.44/b. Market sentiment also remained supported by a widespread between Brent and Dubai, which supports demand for Dubai-linked grades from the Middle East and Russia at the expense of those priced on Dated Brent from the Atlantic Basin.
Similarly, Middle Eastern spot components, Murban and Qatar Marine, saw their values improving slightly by $1.08, or 1.7%, to $63.84/b and $1.07, or 1.8%, to $61.54/b, respectively. The Middle East crude market stayed firm on support from robust refining margins which underpinned demand, while a North Sea pipeline outage also provided support, according to the report.
On 17 January, the ORB stood at $67.07/b, $5.01 above the December average.