Nigerian crude prices have slumped below the federal government’s benchmark of $65 per barrel.
This comes as the Organisation of Petroleum Exporting Countries (OPEC) continues to raise production despite growing geopolitical uncertainties.
Cargoes loaded with Nigerian crude recently remain unsold, highlighting a lack of interest from buyers and sellers in the face of fluctuating price trends in West African crude.
The flat differentials reflect a backwardated market structure coupled with rising freight costs. A premature move by Saudi Arabia and other OPEC+ members to implement deeper production cuts heading into the summer has dampened market sentiment, with Brent prices dipping below $62 per barrel.
The possibility of a U.S.-Iran rapprochement or a breakthrough in Russia-Ukraine peace talks are seen as the biggest threats to the oil market, which currently lacks strong bullish drivers.
Despite this, OPEC+ has decided, for the second consecutive month, to increase oil production by 411,000 barrels per day in June, responding to signs of declining demand, falling prices and bearish market sentiment.
