The Nigerian National Petroleum Corporation (NNPC) has deferred disclosing its future oil export plans, as it tries to keep up with its own share of the oil output cut from the deal involving OPEC+ and other top oil-producing countries.
According to Reuters, the delay is as a result of the on-going negotiation with indigenous oil companies and the international oil majors on how to apply the output cut, in line with the deal between OPEC+ and oil-producing countries.
A few weeks ago, as part of the measure to help stabilise the volatile oil market, OPEC+ had agreed to a 9.7 million barrels per day output cut. In line with that agreement, Nigeria’s share of the output cut is about 400,000 barrels per day.
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The agreed output cut by OPEC+ and top oil producers are due to take effect from May 1, 2020, but the official selling prices (OSPs) for the Nigerian oil, which is usually issued in the second or third week of each month, has still not been issued.
As a result of the negative events in the oil market, traders expect the May OSPs to slump below April’s record low as published by NNPC.
On the uncertainty that hovers round the nation’s oil export plans for May and June, sources disclosed that the plans for June and OSP for May are yet to be disclosed because NNPC is working out the output cuts with the international oil companies.
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The uncertainty and volatility of the oil market have seen crude oil prices crash to unprecedented levels. As a result of very low oil demand and a supply glut, coupled with storage crisis, the Nigerian Bonny light crude was sold at a discount of about $5 as against the $3 premium it is usually sold during normal market conditions.