The Nigerian National Petroleum Corporation has cut the price of every type of crude oil it sells in an effort to regain share of the global oil market amid continued supply glut and growing competition.
This is coming two weeks after Saudi Arabia, the world’s largest crude exporter, cut the prices for November oil sales to Asia and Northwest Europe, and for most grades to other regions.
The NNPC lowered its official selling prices by at least $1 per barrel for 20 out of 26 oil grades monitored by Bloomberg, according to pricing lists.
Qua Iboe, Nigeria’s largest export crude under normal circumstances, was reduced by the most since 2014.
The NNPC cut the selling price of Qua Iboe for November to a 17 cent premium to the benchmark Dated Brent, according to the price list, from $1.07. It reduced the price of Bonny Light to a seven cent premium and Forcados to a 41 cent discount to Dated Brent.
The Group General Manager for the oil-marketing division of the NNPC, MeleKyari, was quoted to have said that the price reductions were due to a “huge cargo overhang” as the country attempts to regain market share.
Like every other producer country, Nigeria is grappling with prices that are less than half of what they were in July 2014.
Over the past few months, the upsurge in militant attacks has worsened the revenue woes plaguing the country, with export flows falling to the lowest in at least nine years earlier this year.
Shipments are gradually resuming, and lower prices are seen as a sign that Nigeria is seeking to become more competitive in an already oversupplied global market.
The reductions take place as the Organisation of Petroleum Exporting Countries, of which Nigeria is a member, attempts to cut its combined output to 32.5 million to 33 million barrels per day in an effort to steady oil markets.
The Minister of State for Petroleum Resources, Dr.IbeKachikwu, had said the country would be exempt from any production cuts, though final details of such an agreement have yet to be worked out.
