Europe’s Nov exports to Nigeria fall

Europe’s base oils exports to Nigeria fell to a six-month low in November, slowing the removal of surplus cargoes from the region and tightening supply in the West African country.

Healthy availability and lower prices of surplus supplies in Europe in second-half 2022 boosted their attraction in outlets like Nigeria.

The dynamic also incentivized buyers in those outlets to hold back until they were comfortable that prices had bottomed out.

Europe’s Group I prices extended their fall through the fourth quarter and into the start of this year.

Buyers’ preference to hold back left Europe with a lingering surplus for longer, adding to downward price pressure. It also left Nigeria facing the prospect of dwindling base oils supplies.

Europe’s base oils exports to Nigeria fell to a six-month low of less than 4,000t in November, EU and UK government data showed. Almost all the supplies were from the UK.

The volume was down from an already-low 6,000t the previous month.

The slowdown in exports coincided with the shipment of a large cargo of Group I base oils from the US to Nigeria in November.

The US supplies highlighted the availability of surplus volumes in other markets and the competition that European sellers faced to secure outlets.

A swathe of shipments from the US had moved to Nigeria in first-half 2022, when supply in Europe was unexpectedly tight.

The November shipment was more of an outlier amid moves to clear lingering supplies before year-end.

The lack of any additional shipments from the US increased the necessity for Nigerian buyers to lock in volumes from Europe or Russia.

Those volumes were anyway more attractive after prices fell to steep discounts compared with levels at the start of the fourth quarter.

Several such shipments from Europe were subsequently lined up for delivery to Nigeria in January.