More signs of choppy times as oil traders push for price cut

Traders who sell Nigeria’s oil are pushing state oil company, NNPC to lower the official price at which it sells some cargoes, the latest challenge to Africa’s biggest producer as it grapples with an acute revenue and foreign exchange shortage.

Nigeria’s oil output has been severely curtailed for most of this by militant attacks in the oil rich Niger Delta.

Bloomberg reports that five companies that market the nation’s crude have raised the issue of high official selling prices, Mele Kyari, general manager of the crude oil marketing division at Nigeria National Petroleum Corp., said by phone Monday. Buyers of Nigerian crude are concerned that uncertainty about supplies from the country are making the nation’s barrels harder to resell, two traders familiar with the West African market said.

“We are aware,” Kyari said. “We have received several communications with our off-takers on this. We are assessing the comments to either validate or disprove it because sometimes you can’t be sure of the validity of these claims.”

Nigeria needs every dollar it can get as it contends with a militant campaign that means annual output is currently on course to be the lowest since 1989, just as a global glut means futures are trading at less than half where they were two years ago.

The nation’s oil minister said Monday Nigeria has asked major oil buyer India for a $15bn upfront payment for the oil it will receive for some years to come. The final details of the deal are yet to be agreed.