By Ayomide Otitoju
About 20 million barrels of Nigerian crude oil scheduled for December and January loading remained unsold as of Thursday, amid intense competition from cheaper and more abundant alternative supplies, according to a Reuters report citing two traders.
The unsold cargoes reflect growing pressure in the global oil market, where analysts point to a widening supply surplus. The oversupply has contributed to renewed selling on the international futures market, pushing Brent crude prices below $60 per barrel this week, their lowest level since May.
Analysts say the situation in Nigeria mirrors a broader West African challenge. “The overhang of West African cargoes partly reflects the broader global crude supply surplus emerging in the first quarter,” Reuters quoted Victoria Grabenwoger, an analyst at energy analytics firm Kpler, as saying.
Angola is facing similar difficulties, with as many as five to six December–January cargoes still available. The large volume of unsold oil has slowed the start of trading for February cargoes, despite Angola having already released its loading schedules and term nominations.
Market watchers note that such a high level of unsold crude is unusual, particularly for near-term loadings, as West African crude trading typically runs about two months ahead. Reuters estimates that the combined unsold volumes for Nigeria and Angola may have reached as much as 40 million barrels earlier in the week.
According to OilX analyst Francisco Gutierrez, current market weakness is being driven by a mix of seasonal factors and changing buying patterns influenced by freight costs and alternative supply options. He noted that Angolan January trade is running about 20 per cent behind its long-term average, partly because China, the world’s largest commodities buyer, has shifted to cheaper or closer crude grades.
Supplies from the Middle East are also displacing medium and heavy West African crudes in Asia, aided by lower official selling prices for January and shorter shipping times. In addition, India’s oil imports from Russia have remained strong despite tighter Western sanctions, further squeezing demand for medium-heavy West African grades.
Traders added that lighter West African crudes are also struggling to compete with supplies from Argentina and Brazil. Nigeria’s situation has been compounded by reduced purchases from the 650,000 barrels-per-day Dangote refinery, which is expected to undergo maintenance in January, leaving the country with more crude to place on the market, Grabenwoger said.
