There are strong indications that Nigeria would further witness a plunge in revenue from the sales of crude oil.
This is coming as report has it that the differentials for the Bonga crude are dropping due to the accumulated oversupply from the May and June program.
A trader was quoted as saying :“The whole June Bonga program is open and unsold.”
According to the report, the May overhang affected grades like Bonga and Forcados. It noted that market participants said that oversupply of Bonga was putting pressure on the already distressed prompt end of the curve primarily traded on a CFR/CIF basis.
According to a European trader, “Cepsa, Total, ExxonMobil are not buying Bonga at this stage and India’s strategic petroleum reserve alone cannot support the grade.”
The report also noted that industry participants said that a late May Bonga CFR cargo was sold at Dated Brent plus $2.00/barrel, while the freight rate for the WAF-UKC Suezmax route was around Worldscale 75.
The report said, Vitol offered a 950,000-barrel cargo of Bonga at Dated Brent plus $4.30/b for arrival into Rotterdam on May 25-31, noting that offers heard for May FOB basis parcels were at Dated Brent plus $1.00/b and for June loaders at Dated Brent plus $1.50/b, which, it said, was characterized as “eternal optimism” by a trader.
The report also noted that other market players said that Bonga might find some support because of the Forcados force majeure and the fall in freight rates, while another trader had said that the Forcados might lost its shine on the back of the force majeure.