- OPEC output disrupted in July on Nigeria attacks, Libya dispute
Cargoes of West African crude oil sailing east are on track to fall in August on fierce competition, shaky demand and disruptions in Nigerian loadings that forced at least one cancelled cargo, according to Reuters.
A total of 55 cargoes for 1.685 million barrels per day (bpd) are booked to sail to Asia this month. The total is just under two per cent lower than the planned bookings in July, but is more than eight per cent lower than August last year.
Overall buying in Asia is in question as refinery margins hit five-year lows last month due to a growing excess of refined products.
Some refineries are already processing less crude oil, while others are preparing for maintenance later in the third quarter.
At the same time, nearly all crude oil sellers are targeting Asia. Imports of Iranian crude oil from China, India, Japan and South Korea increased markedly in June, the latest month of data available, as Iran’s efforts to regain market share lost during years of sanctions paid off. As a result, some West African oil has been edged out. The biggest difference from a year earlier was in bookings for India, due in part to the unpredictability of Nigerian oil loadings.
Meanwhile, a Bloomberg survey has shown that crude oil output from members of the Organisation of Petroleum Exporting Countries (OPEC) was disrupted in July by militant attacks in Nigeria and political disputes in Libya.
Output from the 13 established members of the OPEC, excluding new entrant Gabon, fell by 80,000 barrels a day last month, a Bloomberg survey of analysts, oil companies and ship-tracking data showed.
Nigeria led the decline with a 70,000-barrel-a-day monthly drop to 1.52 million, while Libya and Saudi Arabia reduced output by 20,000 and 40,000 barrels a day respectively.
Gabon joined OPEC on July 1, becoming the smallest member with average output of 210,000 barrels a day. Because the group expanded to 14 nations, total production in July actually increased to 33.24 million barrels a day from 33.11 million the prior month. Gabon initially joined the group in 1975, but ended its membership 20 years later.
Nigeria has suffered steep crude output losses this year as militant attacks targeted oil infrastructure. Production in May fell to the lowest level in more than 27 years. While output recovered in June, it fell again in July following the disruption of supplies to the Qua Iboe terminal, which shipped an average of 342,000 barrels a day last year.
Libya’s production fell by 20,000 barrels a day to 300,000 in July. The Arabian Gulf Oil Co. halted output at the Sarir field last month after a protest by oil-facility guards shut the Eastern port of Hariga, blocking exports. The Tripoli-based Government of National Accord reached a deal with guards last week to reopen Es Sider and Ras Lanuf, two of its biggest oil terminals that have been closed since 2014, although shipments have yet to resume.
Output disruptions helped raise West Texas Intermediate crude