(Bloomberg) -- The oil price crash isn’t getting any easier for Nigeria.
Late on Monday, the nation released the prices for most of its crude oil grades for sale in May. The figures reflect an urgent need to offload cargoes in what is a highly competitive marketplace. Even so, traders cautioned that the prices -- $10 a barrel or less if the market doesn’t improve -- still may not tempt enough buyers because of the demand collapse triggered by the coronavirus.
Africa’s largest economy is particularly vulnerable to the oil-price rout that’s been brought about by the disease. The country, which has a fiscal breakeven well above $100 a barrel, mostly sells very light crudes that are low in sulfur -- a similar variety to those that the U.S. produces in abundance these days. Worse for Nigeria, it lacks the space to store unwanted supplies at a time the cost of hiring ships to take its supplies to importers has soared because many tankers are being used for floating storage.
Like a lot of oil producing countries, Nigeria sells its crudes at differentials to benchmarks. For the West African country, that marker is Dated Brent, published by S&P Global Platts. The measure stood at $13.62 a barrel on Monday.
Two of Nigeria’s banner grades -- Qua Iboe and Bonny Light -- will sell at discounts of $3.92 and $3.95 respectively to Dated Brent in May, according to a price list seen by Bloomberg. Both are more deeply discounted than they were in April, when prices were already staggeringly cheap by historical standards. The majority of the country’s grades will be sold for at least $3 a barrel below the benchmark next month.
Two traders said that the prices still won’t be cheap enough for Nigeria to sell its excess cargoes, a third said the discounts may be attractive enough to lift sales.
The release of the Nigerian official selling prices was about a week late. The country is also running several days late in releasing export loading plans for June.
The dire state of the oil market has meant that, despite being so cheap -- $50 or $60 a barrel would have been realistic just a few months ago -- Nigerian barrels have been selling slowly. Traders estimated that, as of late last week, about 30 out of 65 May-loading cargoes still hadn’t been sold. Normally just a handful would still be available so late in a month.
The coronavirus has halted swathes of the global transportation system, destroying demand for fuels in the process. Some estimates are that the reduction in demand could have been as big as 35 million barrels a day, or roughly 35% of global consumption. Nigeria is one of the countries taking part in a global pact to limit oil production by 9.7 million barrels a day.
©2020 Bloomberg L.P.