Nigeria's Reduction in Shipment Tightens US Market

International Business Times

24 March 2011

Nigeria's Reduction in Shipment Tightens US Market

WTI crude oil strengthened further in European session. Currently trading at 106.4, the front-month contract is approaching the 30-high of 106.95 made on March 7. Brent crude and fuel prices moved sideways. While uncertainty in the MENA region has supported oil prices, the exceptional performance in WTI crude these 2 days have been driven by the cut in Nigerian shipments in coming 2 months. Gold climbed higher, attempting to test the record high of 1445.7 made also on March 7. The metal is appealing as a safe-haven asset and a store of value.

New reported Nigeria will reduce daily exports of 14 main grades by 1.5% in May from April. As an OPEC member, Nigeria has the second largest oil reserves in Africa and the biggest producer in the continent. According the OPEC's March report, the country produced 2.10M bpd, or 7.67% of total output by OPEC-11, in February. Nigeria ships over 80% of its oil production with the US taking up around 40% of the exports. Its light, sweet crude is a preferred gasoline feedstock.