Nigerian crude prices surged above $70 per barrel, marginally higher than the major oil contracts traded on the global oil market.
Major oil contracts reached a two-week high yesterday after fresh Houthi attacks on shipping in the Red Sea raised concerns over supply disruptions.
Reuters reported on Tuesday that four crew members aboard the Greek-operated, Liberian-flagged bulk carrier Eternity C were killed by drones and speedboats off Yemen’s coast.
Nigerian oil blends, which included Bonny Light, Brass River, and Qua Iboe, settled at $72.3 a barrel on Tuesday, $2.7 below the Federal Government’s benchmark for Crude.
Oil prices dipped slightly during Wednesday’s session, mainly because of an uptick in US crude inventory levels. Oil traders also remained cautious ahead of upcoming tariff announcements from President Trump, which also contributed to the decline.
Brent oil futures for September delivery fell to $69.91 per barrel, while West Texas Intermediate (WTI) crude futures dropped by 0.4% to $68 per barrel.
The American Petroleum Institute (API) revealed a surprising increase in US crude oil inventories for the week ending July 4, up 7.1 million barrels versus a forecasted draw of 2.8 million barrels, following a previous increase of only 680,000 barrels.
Gasoline inventories fell by 2.2 million barrels, and distillate stocks decreased by 800,000 barrels. Data indicates potential oversupply issues in the US market due to demand and supply challenges. Market participants await the EIA report due later today, which, if aligned with API’s trend, would mark the largest increase since January
Dangote refinery plans to cease importing crude oil entirely by December 2025, aiming to switch fully to Nigerian crude. This transition would eliminate the need for importing and boost the country’s balance of payment.
The refinery sourced about half of its crude domestically in June, and suppliers are expected to sell more as their foreign supply commitments end soon. Devakumar Edwin, Vice President of Dangote Industries and head of the 650,000 barrel-per-day Lagos refinery, said the plant is set to stop receiving foreign crude and will procure feedstock locally.
He stated, “We expect some of the long-term contracts will expire. Personally, and as a company, we expect that before the end of the year, we can transition 100 percent to local crude.” Dangote claims the plant was previously reliant on US imports, even with the naira-for-crude agreement in place.
Petralon Energy plans to boost its Nigerian crude output by 2,500 bpd through further drilling at the Dawes Island field. The company recently completed a new well there, helping to maximize output. Petralon 54 Ltd, a subsidiary of Petralon Energy, manages the field under Petroleum Prospecting License PPL 259.
Meanwhile, Dangote refinery slashed petrol prices at the depot to N820 per liter, down from N840 per liter. The Group Spokesperson announced that this new price would be effective immediately and that the refinery is now engaging more marketers to distribute the products.