NIGERIAN OUTPUT TO SUPPORT DEMAND

摘要

Apart from the seasonal weakness in oil demand, the Suezmax tanker market will also be affected by the recent extension of the production cut by OPEC as it is expected to curb global crude oil trade. Suezmax demand on AG-India will be affected by lower production by the Middle East and OPEC. However, the recent recovery in oil output in Nigeria – a key loading region for Suezmaxes – is a positive sign for the market as it will lead to increased tonnage demand on the West Africa-US and West Africa-Europe routes. Nigeria’s output, after declining since the beginning of the year, grew by 274kbpd to 1.48 mbpd in April as the country is gradually restoring its oil infrastructure, damaged by militant attacks. Forcados crude loading in Nigeria started in May for the first time in six months, which is expected to add about 200,000 bpd supply to the market. The country’s crude production is likely to reach 1.7-1.8mbpd by end-2017, if everything goes well. Rising US crude production and a corresponding increase in exports will also support demand for Suezmax tankers along with VLCCs. Drewry believes any further support for Suezmaxes will depend on undisrupted production from Nigeria, as there is still much uncertainty with regard to the expected increase in production, as the peace is still very fragile.