- Crude oil price slumps 3% after IEA’s gloomy forecast
Mobil Producing Nigeria Unlimited, a
unit of ExxonMobil, will resume shipment of Qua Iboe crude, Nigeria’s
largest grade of crude oil in October, three months after the company
had declared force majeure on the exports of the grade.
This is coming as oil prices slumped
three per cent Tuesday following another gloomy prediction by the
International Energy Agency (IEA) on demand growth that suggested that
oversupply in the oil market might persist for longer than anticipated.
ExxonMobil had declared the force
majeure after it observed a leak caused by what it described as a
“system anomaly” during a routine check of its loading facility on July
14, this year.
The cause of the leak was not clear, but
the force majeure came just days after a militant group, the Niger
Delta Avengers (NDA), claimed to have bombed the company’s 48-inch Qua
Iboe crude oil export pipeline on July 11.
But 24 hours after the claim by the militants, the company’s spokesperson, Todd Spitler, debunked the claim, saying “there was no attack on our facilities.”
But 24 hours after the claim by the militants, the company’s spokesperson, Todd Spitler, debunked the claim, saying “there was no attack on our facilities.”
However, citing industry sources,
Reuters reported that the company is offering an October-loading cargo
of Qua Iboe crude oil, the first offer since the company declared the
force majeure.
It was not clear if the pipeline had been repaired, or if the company expected it to be back on stream in time to load crude in October.
It was not clear if the pipeline had been repaired, or if the company expected it to be back on stream in time to load crude in October.
But the cargo is offered for October 8-16 loading at a premium of $1.80 per barrel to dated Brent.
A spokesman for Exxon said the force majeure remained in effect but did not give a timeframe on the resumption of operations.
A spokesman for Exxon said the force majeure remained in effect but did not give a timeframe on the resumption of operations.
While ExxonMobil said at the time it
declared force majeure that the export terminal was operating, traders
said the company did not release a revised loading schedule for the
crude exports.
The last ship to load crude at the Qua Iboe terminal was the Ottoman Nobility on July 9.
One of the three other ships scheduled to load the crude had been near the terminal since July 12.
A vessel loads one million barrel of the grade every three to four days, and exports of 250,000 barrels per day aboard eight vessels were scheduled for July.
One of the three other ships scheduled to load the crude had been near the terminal since July 12.
A vessel loads one million barrel of the grade every three to four days, and exports of 250,000 barrels per day aboard eight vessels were scheduled for July.
Before it declared a ceasefire recently,
the Avengers had warned that if the company moved forward with repairs
“something big…will happen,” and threatened to attack the company’s
workers, instead of blowing up its facilities.
Shell-operated Forcados crude oil exports were halted since the Avengers attacked its subsea pipeline in February.
In a related development, oil prices fell tuesday on concerns over increased drilling in the United States and as investors took profits after oil prices rose close to one per cent in the previous session.
Shell-operated Forcados crude oil exports were halted since the Avengers attacked its subsea pipeline in February.
In a related development, oil prices fell tuesday on concerns over increased drilling in the United States and as investors took profits after oil prices rose close to one per cent in the previous session.
While the Brent crude was down $1, or 2
per cent, at $47.32 a barrel, the US West Texas Intermediate crude fell
$1.25, or 2.7 per cent, to $45.04.
The IEA, energy adviser to over 26
industrialised countries, said a sharp slowdown in global oil demand
growth, coupled with ballooning inventories and rising supply, means the
crude market would be oversupplied at least through the first six
months of 2017.
IEA’s gloomy forecast came a day after OPEC also predicted oversupply in the oil market in 2017.
IEA’s prediction contrasts with the agency’s last forecast a month ago for supply and demand to be broadly in balance over the rest of this year and for inventories to fall swiftly.
IEA’s prediction contrasts with the agency’s last forecast a month ago for supply and demand to be broadly in balance over the rest of this year and for inventories to fall swiftly.
The IEA’s latest comments follow a
surprisingly OPEC’s bearish outlook published in the cartel’s monthly
Oil Market Report (OMR) on Monday.
Oil traders were quoted as saying that
the price falls were an indication that increasing oil drilling activity
in the United States was still a concern.
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