News

1) Nigeria is facing supply constraints again as a new bout of attacks on infrastructure has caused force majeure to be declared on the Qua Iboe crude stream once more. Despite streams such as Bonny Light having force majeure lifted on them earlier in the month, renewed attacks are again stoking supply fears.

As our ClipperData illustrates, Nigerian crude oil loadings are rising again this month after reaching a low for 2016 in June. Nonetheless, the grades that we have seen facing challenges this year – Bonny Light, Brass River, Escravos, Forcados and Qua Iboe – account for over 45 percent of crude loadings. Hence further complications for these crude streams are likely to put exports under pressure going forward.

As JODI data illustrate below, crude inventories for Nigeria are already depleted. Hence, while storage has been drawn down in recent months to offset supply losses, this cannot continue as stocks are drained.

2) Another week, another rig rise. The chart below illustrates rather nicely the price sensitivity of U.S. shale; as prices have risen above $45 a barrel in recent months, the rig count appears to have bottomed out.

The latest rig count from Baker Hughes shows the most rigs have been added since December, and have now risen for seven of the last eight weeks. As prices reverse lower once more, drilling activity is likely to face headwinds once more.

3) Ongoing fears of oversupply are encouraging hedge funds to liquidate their View Full Article