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Oil Prices Soar After EIA Reports Large Crude Draw

Oil Prices Soar After EIA Reports Large Crude Draw

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Sabotage Of Nigerian Pipeline Causes Force Majeure

Nigerian firm Aiteo Oil Exploration and Production Company, has discovered that sabotage was the cause of the fire that caused Nigeria’s oil production to fall 8% per day, creating a force majeure. All six saboteurs, The Joint Military Task Force said on Wednesday, had been killed in the blaze.

The Nembe Creek Trunk Line, with a capacity of 150,000 barrels per day, was shuttered following the fire that has now been linked back. The pipeline carries oil from the eastern Niger Delta to the Bonny Export Terminal.

This is the second shutdown of the pipeline in as many months, after an explosion from a well head in Nembe Creek resulted in a separate fire.

Aiteo said it had repaired the breach, but did not disclose whether the oil was flowing again at normal rates.

Despite the force majeure which remains in effect, preliminary loading programs showed on Wednesday that four major Nigerian crude oil grades will see an uptick in exports in June, according to Reuters. The largest increase will come from its Forcados grade, which will see June loadings of 230,000 bpd, up from 127,000 bpd in May.

In total, Reuters data shows, the four Nigerian grades will see a 155,000 barrel-per-day export increase in June over May.

Nigeria has had a long and painful history with militants disrupting the country’s oil flows, but recent months has seen relatively stability in production levels between 1.723 and 1.733 million barrels per day, according to OPEC’s Monthly Oil Market Report.

The production stability for the African nation this year comes as its breakeven costs fell to just US$23 per barrel, according to Nigerian Petroleum Minister Emmanuel Ibe Kachikwu, who added that the goal is to reduce this per barrel cost further to US$15 per barrel.

By Julianne Geiger for Oilprice.com

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