As U.S. crude inventories jump to a further record high, prices are chugging lower once again. A backdrop of strong economic data is also helping to sweep crude lower, via the broom of a stronger dollar. As focus shifts back onto weaker U.S. fundamentals, hark, here are five things to consider in oil markets today.
1) In the last few blogs, we’ve been discussing some of the ‘problem’ grades in Nigeria – such as Qua Iboe and Forcados – which have been stymieing both production and exports. One grade where we have seen strength from is medium sweet Bonga. That is, until now.
Shell has just announced that it has halted production at its Bonga field in Nigeria to undertake maintenance, which is expected to last at least a month (production is expected to return in April at some point). According to our ClipperData, Bonga export loadings averaged 155,000 barrels per day in 2015, before rising over 20 percent in 2016 to 187,000 bpd. After November’s volume reached the highest on our records, Bonga loadings look set to tank as we skip through spring.
That said, a VLCC carrying