A glut of unsold Nigerian oil has again built up, with up to half of the output due to be loaded next month still looking for buyers.
The nation’s oil traders said the surplus was partly caused by a claim for back taxes from shipping companies, which led to mistrust among some of the companies about shipping their ships. to collect the barrels of the West African nation.
Although the government later clarified that there would be a six-month grace period to comply with the tax request, traders said the lack of sales showed that Nigeria needs to do more to solve the problem.
The surplus is a sign that global oil supply cuts by major producing countries have not yet tightened all markets. Between 20 and 22 cargoes remain unsold for July, about half of the total, according to West African crude traders. Shipments are usually one million barrels.
Earlier this month, some shipowners were said to be avoiding the West African nation after a series of multibillion-dollar tax bills were sent to try to recover unpaid duties from 2010 to 2019. Tax authorities of the country have given shipping companies the grace period to reconcile tax arrears through a committee that includes shippers and regulators.
The cost of shipping oil from Nigeria stood at $53,463 a day on Thursday, above the annual average, according to data from the Baltic Exchange. Freight for ships carrying nearly 1 million barrels of crude from Nigeria to Europe rose by the most in more than a year last week due to the tax issue.
Nigeria’s sluggish sales contrasted with a more upbeat picture in Angola, where crude supplies are depleted for July and spreads are widening, the people said. Supplies from Gabon and Chad are also mostly sold for July.
Much of Angola’s output is of a very sweet variety that is popular with refiners in China, where demand remains strong.
Angola’s Cabinda grade traded at a premium of 60 to 70 cents a barrel to Dated Brent for July loading earlier this week, up from a 30-cent premium for June barrels.
